Crude Oil Market Analysis

[Solid ECN]

Crude Oil - decline after reports of continued supplies from Iraq​

After a significant increase, quotes returned to levels below 100 and, according to leading experts, the downward dynamics are due to reports from the Iraqi State Oil Company (SOMO), which indicate the intention to continue continuous export of fuel, despite ongoing mass protests, which, in turn, weakened the fears of investors about the shortage of raw materials. European countries are currently called the key direction of supplies, and, according to SOMO, if buyers express interest, the company is ready to increase the volume of transportation of “black gold” to the region from 20% to 40%, for which the delegation has already gone to Germany for negotiations.

An additional pressure factor on the quotes was the statistics on stocks from the American Petroleum Institute (API), according to which the index rose by 0.593M barrels after falling by 5.632M a week earlier.

As for the demand for oil contracts from investors, last week, there were global changes: according to the US Commodity Futures Trading Commission (CFTC), the number of net speculative positions for the first time since the beginning of summer reached 246.2K, rising from 214.9K contracts a week earlier, which may be the primary sign of a change in the trend in the asset.

On the daily chart of the asset, the trading instrument has left the limits of the local downwards channel, having overcome the resistance line. Technical indicators reversed upwards: fast EMAs of the Alligator indicator crossed the signal line upwards, and the AO oscillator histogram forms upward bars in the buying zone.

Resistance levels: 102.53, 111.97 | Support levels: 96.48, 91.16​

 

[Solid ECN]

Crude Oil - growth ahead of OPEC+ meeting​

Quotes of Brent Crude Oil are trading around 95, and the asset's volatility is very high ahead of the meeting of representatives of the Organization of the Petroleum Exporting Countries.

Last week, the key event was the decision of the G7 countries to introduce new restrictions on the supply of Russian oil: it is supposed to set a price ceiling for raw materials and prohibit the insurance of ships transporting them at a higher cost. Deputy Chairman of the Russian government, Alexander Novak, has already stated that official Moscow will not sell energy resources to those states that use non-market pricing schemes and intends to reorient itself to other regions. Thus, this decision will have almost no effect on the volume of exports of Russian oil in the world, and pressure on energy prices will be minimal.

Today at 12:00 (GMT+2), the leaders of the OPEC+ countries will discuss the parameters for implementing the oil production agreement for the period from October to the end of this year. According to preliminary information, the cartel intends to maintain the current agreements on a gradual increase in production by 100K barrels per day, which is another positive factor for the market. At least Deputy Prime Minister of the Russian Federation Alexander Novak and Minister of Energy of Saudi Arabia Prince Abdulaziz bin Salman have already spoken about this.

On the daily chart of the asset, the trading instrument is moving within a downward correction to the global uptrend, and after reaching the July low at 91.00, it is reversing upwards. Technical indicators slowed the decline: indicator Alligator's EMA oscillation range began to narrow, and the histogram of the AO oscillator was close to the transition level.

Resistance levels: 97.26, 103.5 | Support levels: 91.48, 85.6​

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[Solid ECN]

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Crude Oil - Oil prices are consolidating​

Brent Crude Oil prices show near-zero dynamics, consolidating near the level of 91. Pressure on quotes is exerted by expectations of the outcome of the US Federal Reserve meeting, at which the interest rate may be raised by 75 basis points for the third time in a row. The Bank of England and the National Bank of Switzerland are also expected to tighten their monetary policies this week. The increase in interest rates is aimed at containing the sharp increase in inflation, but also leads to a slowdown in economic activity. In particular, analysts assess the risks of a recession in the European economy, which also faced serious challenges due to the energy crisis.

Another negative factor affecting the quotes of "black gold" is the fall in industrial activity in China due to its zero tolerance policy towards COVID-19. Finally, the markets are concerned about the restrictions that apply to the import of oil and oil products from the Russian Federation. Western countries continue to discuss the introduction of marginal prices for Russian "black gold".

Today, the focus of investors will be data from the American Petroleum Institute (API) for the week ended September 16. The previous report reflected a sharp increase in reserves of "black gold" by 6.035 million barrels, while the US Department of Energy reported an increase of only 2.442 million barrels.

In the D1 chart, Bollinger Bands are reversing horizontally. The price range is almost constant, remaining rather spacious for the current level of activity in the market. MACD is growing preserving a weak buy signal (located above the signal line). Stochastic is showing similar dynamics, having reversed upwards at the end of last week. Current readings of the indicators signal in favor of a corrective growth in the ultra-short term.

Resistance levels: 91, 92.47, 94.5, 96.54 | Support levels: 88.79, 87, 86, 85​

 

[Solid ECN]

Crude Oil - Growth in US inventories puts pressure on asset quotes

According to a Reuters report yesterday, OPEC+'s target deviation in production is currently around 3.58M barrels per day (about 3.5% of global demand). The excess relative to the August value of 2.89M barrels amounted to 24%. According to cartel representatives, the negative dynamics are observed due to insufficient investment in oil projects in Nigeria and Angola and the impact of Western sanctions on Russian production. Thus, the production of hydrocarbons in Nigeria in August fell by a record 1.0M barrels against fuel theft from pipelines.

On the daily chart of the asset, the price is moving within a downwards corridor, approaching the year's low. Technical indicators maintain a sell signal: fast EMAs of the Alligator indicator remain below the signal line, and the AO oscillator histogram forms downward bars in the sell zone.

Resistance levels: 91.15, 96.4 | Support levels: 86.85, 77.66​

 

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Crude Oil - The price is in a correction, a fall is possible.​

On the daily chart, the first wave of the higher level (1) ended, and a downward correction develops as the second wave (2), within which the wave C of (2) develops. Now, the third wave of the lower level iii of C is forming, within which the wave (iii) of iii is developing.

If the assumption is correct, the price of the asset will fall to the area of 67 – 51.5. In this scenario, critical stop loss level is 89.95.

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[Solid ECN]

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Crude Oil - "black gold" remains under pressure​

Pressure on quotes is exerted by growing fears of a global recession, which are confirmed in macroeconomic publications and comments by official representatives of monetary regulators. In addition, investors are concerned about possible disruptions in oil supplies from Russia, as the country is under sanctions pressure, and the geopolitical risks associated with the escalation of the military conflict in Ukraine are only intensifying. Finally, the fact of the continued release of the energy carrier from the US reserve storage facilities contributes to the decline in "black gold", which leads to a short-term increase in supply on the market. Inventories fell to a 1984 low last week to 427.0 million barrels, according to The Wall Street Journal. In addition, on Monday, the Organization for Economic Cooperation and Development lowered its forecasts for global economic growth: this year it may still be 3.0%, but next year it will drop to 2.2% instead of the 2.8% previously expected.

The American Petroleum Institute (API) report released the day before pointed to an increase in reserves by 4.15 million barrels. For the last reporting week, the report showed an increase in the indicator by 1.035 million barrels. Today, investors are waiting for the publication of similar data from the Energy Information Administration of the US Department of Energy (EIA).

On the daily chart, Bollinger Bands are steadily declining. The price range expands from below, making way for new local lows for the "bears". MACD is preserving a weak sell signal (located below the signal line). Stochastic, having reached the zero level, reversed into the horizontal plane, indicating risks of the oversold instrument in the ultra-short term.

Resistance levels: 78, 79.24, 81, 83 | Support levels: 76, 74, 73, 72​

 

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Crude Oil - Waiting for the OPEC+ meeting​

Over the past few months, the oil market has been under serious pressure due to growing signs of a slowdown in the global economy and the strengthening of the US dollar, supported by the actions of the US financial regulator to tighten monetary policy. To stabilize prices in the current environment, leading exporters may go for another reduction in production, the most significant since the beginning of the coronavirus pandemic.

The next summit of the OPEC+ cartel and its allies will take place on Wednesday, and, according to sources within the organization, it may decide to reduce the production of “black gold” by 1 million barrels per day or even more. It is worth noting that already now exporters cannot fully carry out the established production quotas due to a lack of investment or sanctions pressure on the industry. Experts believe that a change in existing plans may lead to a momentary increase in oil prices, but the general market downward trend will continue, as the risks of a recession in the global economy will continue to grow.

The price is close to the level of 90 (the center line of Bollinger Bands), a breakout of which will give the prospect of further growth of quotations to the levels of 93.5 (Murray [7/8], Fibonacci retracement of 61.8%), 96.4 (upper line of Bollinger Bands). The key point for the "bears" seems to be 87.5 (Murray [5/8]), consolidation below which may lead to a decline to the area of 81.25 (Murray [5/8]), 75.00 (Murray [4/8]).

Resistance levels: 90, 93.5, 96.4 | Support levels: 87.5, 81.25, 75​

 

[Solid ECN]

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Crude Oil - Upward correction ahead of the OPEC+ meeting​

According to sources within the organization, during the meeting, a decision may be made to reduce the production of "black gold" by 1 million barrels to stabilize prices. Larger production adjustments than previously expected will be an indicator of producers' concern about the rapid slowdown in the global economy in the face of active tightening of monetary policy by leading central banks. A number of experts believe that a consistent increase in interest rates carries the risk of a contraction in the economy in the future. These fears led to the most rapid drop in oil prices since the start of the coronavirus pandemic in early 2020, forcing OPEC+ to think about ways to stabilize the market. Any move by the cartel to raise prices could put additional pressure on Western consumers, who are under unprecedented pressure amid the energy crisis.

An additional factor contributing to the strengthening of the Brent Crude Oil rate remains the disruption of energy supplies to Europe. The International Energy Agency (IEA) has estimated that gas consumption in the countries of the region will decrease by 10% this year alone, outstripping the indicators of the largest economic crisis in 2009 and the COVID-19 pandemic in 2020. Of course, fuel shortages, as well as a complete restructuring of supply chains, will put pressure on oil prices for a long time. Against this background, one can assume that in the long term the quotes of the trading instrument will correct to the level of 95.50, in the area of which the further direction of quotes will be determined.

The long-term trend is downward, but at the moment a correction is developing with the target at 95.5. If the "bears" hold this level, the decline will continue to the area of 89. Otherwise, growth to 104 can be expected.

The midterm trend remains downtrend. Now the price is moving towards the key resistance at 92.77–91.92, after the test of which it is worth considering new short positions with a target at the September low of 83.50. If the resistance of 92.77–91.92 is broken upwards, then the trend will change to an upward one, and in this case, it is worth moving on to looking for long positions with the target of 101.27–100.42.

Resistance levels: 95.5, 104 | Support levels: 88, 83.5​

 

[Solid ECN]

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Crude Oil - Upward correction ahead of the OPEC+ meeting​

According to sources within the organization, during the meeting, a decision may be made to reduce the production of "black gold" by 1.0 million barrels to stabilize prices. Larger production adjustments than previously expected will be an indicator of producers' concern about the rapid slowdown in the global economy in the face of active tightening of monetary policy by leading central banks. A number of experts believe that a consistent increase in interest rates carries the risk of a contraction in the economy in the future. These fears led to the most rapid drop in oil prices since the start of the coronavirus pandemic in early 2020, forcing OPEC+ to think about ways to stabilize the market. Any move by the cartel to raise prices could put additional pressure on Western consumers, who are under unprecedented pressure amid the energy crisis.

The long-term trend is downward, but at the moment a correction is developing with the target at 95.50. If the "bears" hold this level, the decline will continue to the area of 89.00. Otherwise, growth to 104.00 can be expected.

The midterm trend remains downtrend. Now the price is moving towards the key resistance at 92.77–91.92, after the test of which it is worth considering new short positions with a target at the September low of 83.50. If the resistance of 92.77–91.92 is broken upwards, then the trend will change to an upward one, and in this case, it is worth moving on to looking for long positions with the target of 101.27–100.42.

Resistance levels: 95.5, 104 | Support levels: 88, 83.5​

 

[Solid ECN]

Crude Oil - Growth is possible.​

On the daily chart, the first wave of the higher level (1) formed, and the formation of downward correction ended as the second wave (2), within which the wave C of (2) formed. Now, the development of the upward third wave (3) has started, within which the first entry wave of the lower level i of 1 of (3) is forming.

If the assumption is correct, the asset will grow to the area of 103.83 – 115.12. In this scenario, critical stop loss level is 76.07.

 

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Crude Oil Technical Outlook​

Crude oil price trades negatively to press on 89.75 level, to hint heading to decline on the intraday basis, targeting testing 88.2 initially, noting that breaking this level will extend the bearish wave towards 86.65 as a next negative target.

Therefore, the bearish bias will be suggested for today, noting that breaching 90.6 will stop the current negative pressure and lead the price to resume the bullish wave that its next main target located at 93.17. The expected trading range for today is between 88 support and 91 resistances.

The expected trend for today: Bearish​

 

[Solid ECN]

Crude oil price approaches the extended target​

Crude oil price shows positive trades to approach testing the key resistance 88.65, which represents one of the next trend keys besides 86.65 support line, as the price needs to surpass one of these levels to detect its destination clearly, which makes us continue with our neutrality until now.

To review the details of the expected targets of the beach, the expected trading range for today is between 85.50 support and 89.50 resistance. The expected trend for today: Neutral​

 

[Solid ECN]

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Crude Oil - Upward Momentum may Continue​

Benchmark Brent Crude Oil is correcting to trade just above 91 after OPEC+ decided to cut production by 2.0M barrels per day.

The cartel's actions caused a lot of discussion from Western countries, but the organization's secretary general, Haitham al-Ghais, said that this deal was not a political decision but was dictated solely by the balance of supply and demand. In his opinion, the situation on the market may change significantly soon, and the cartel needs to react now. According to other officials, these measures are dictated by a ban on importing oil and petroleum products from Russia to the EU, which will come into force on December 5.

On the daily chart of the asset, the price is moving within a downwards corridor near the resistance line.

Resistance levels: 93.86, 99 | Support levels: 88.80, 82.37​

 

[Solid ECN]

Crude Oil - Growth is possible.​

On the daily chart, the upward wave C develops, within which the first wave 1 of (1) of C formed, and a downward correction ended as the second wave 2 of (1) of C, within which the wave c of 2 formed. Now, the development of the third wave 3 of (1) has started, within which the first entry wave of the lower level (i) of i of 3 has formed, and the wave (ii) of i of 3 has ended.

If the assumption is correct, the asset will grow to the area of 104.25 – 110.4. In this scenario, critical stop loss level is 83.12.

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[Solid ECN]

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Crude Oil - Growth is possible.​

On the daily chart, the first wave of the higher level (1) formed, a downward correction ended as the second wave (2), and the development of the upward third wave (3) started. Now, the first entry wave of the lower level i of 1 of (3) is forming, within which the development of the wave (iii) of i is starting.

If the assumption is correct, the asset will grow to the area of 103.83–115.12. In this scenario, critical stop loss level is 82.20.

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[Bravado]

The state of the market is truly unpredictable. It is influenced by a variety of factors. However, it is encouraging to see moderate growth at the moment.

 

[Solid ECN]

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Crude Oil - US inventory growth puts pressure on oil quotes​

The long-term trend is downward. The key resistance level is located at 93.5, and the key support is around 76.50. Last week, buyers unsuccessfully tried to break out the 86.5 mark, therefore, we can assume a decline in prices to the nearest support level of 81.

The mid-term trend remains upward. Last week, market participants tried to break the key trend support in the area of 86.21–85.46. The trading week closed inside the range, which indicates the retention of support. The trend target is the October maximum in the area of target zone 2 (94.27–93.43). Consequently, it will be possible to consider oil purchases when the first signs of an upward movement appear from approximately the current levels.

Resistance levels: 86.5, 89.5, 93.5 | Support levels: 81, 76.5​

 

[Solid ECN]

Crude Oil - US fears Russia's complete refusal to import oil​

Quotes are growing against the backdrop of new information from the United States about the possible introduction of a price limit for imported from the Russian Federation oil. After negotiations with the parties to the agreement, the American authorities decided to soften their position, and the value was changed from 50.0 dollars per barrel to 60.0 dollars per barrel, which was supported by the G7 countries, Australia and South Korea. US Treasury Secretary Janet Yellen explained the decision by saying that if the price is too low, Russia can completely abandon imports.

On the daily chart of the asset, the price is moving within the downwards corridor, coming close to the resistance line.

Resistance levels: 97.6, 103.5 | Support levels: 89.8, 82.5​

 

[Solid ECN]

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US Crude analysis​

The short-term oil uptrend continued yesterday. As a result, the Target Zone 89.51 - 88.76 was reached. After that, the price corrected and tested the Additional Zone 87.42 - 87.23. If the AZ is held, the rise will continue, and yesterday's high will be updated.

If the Additional Zone is broken out downside and the price consolidates below, the correction will continue with the target in the Intermediary Zone 85.54 - 85.17. It is also profitable to consider new purchases in the IZ with a target at yesterday's high.

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US Crude trading ideas for today:

• Buy according to the pattern in Additional Zone 87.42 - 87.23. Take Profit: 89.24. Stop Loss: according to the pattern rules.
• Buy according to the pattern in Intermediary Zone 85.54 - 85.17. Take Profit: 89.24. Stop Loss: according to the pattern rules.

 

[Solid ECN]

Oil price forecast ​

Oil short-term uptrend continued. The high of October 27 was broken through. Oil traders tried to break out the upper Target Zone 89.51 – 88.76 but failed. The oil price is now being corrected down with a potential target to test Additional Zone 87.80 – 87.61. After the AZ zone test, I suggest entering new purchases according to the pattern with a target at yesterday’s high.

If the price breaks out the Additional Zone downside within the correction, the oil price should reach the Intermediary Zone 85.92 – 85.55, which is the border of the short-term uptrend. In this scenario, one could also enter purchases after the price reaches the IZ.

US Crude trading ideas for today:

• Buy according to the pattern in Additional Zone 87.80 - 87.61. Take Profit: 89.61 - Stop Loss: according to the pattern rules.
• Buy according to the pattern in Intermediary Zone 85.92 - 85.55. Take Profit: 89.61 - Stop Loss: according to the pattern rules.

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