Crude oil futures prices advanced slightly in early trading on Tuesday, after Saudi Arabia yesterday denied a media report that it was discussing increasing oil supply with OPEC and its allies, and in the background concerns persist about the demand outlook in China due to renewed closures to combat the outbreak of the COVID-19 virus. .
By 5:20 GMT
- Futures prices for January 2022 delivery of West Texas crude oil (WTI) on the New York Mercantile Exchange increased by 0.34%, to settle at $80.31 per barrel on the New York Mercantile Exchange, after rising by 0.20% in yesterday’s trading.
- Futures contracts for January 2022 delivery of Brent crude oil rose on the ICE Futures Europe exchange by 0.48%, to settle at $87.87 per barrel, after rising by 0.25% in yesterday’s trading.
(Futures contract is a contract that obliges the buyer to buy a specific asset at a predetermined price, and delivery takes place at a later time in the future)
Both WTI and Brent crude fell briefly to levels last seen in January after ending Friday at a two-month low.
This came after the Wall Street Journal, citing unnamed delegates, said that Saudi Arabia and other producers from the Organization of the Petroleum Exporting Countries (OPEC) are discussing increasing production by up to 500,000 barrels per day, such a step would help ease tensions with the Biden administration and preserve On the flow of energy with the activation of new efforts to reduce the Russian oil industry.
Oil then trimmed losses after news reports said the Saudi energy minister told a state news agency there had been no discussions about increasing production. The OPEC+ production cut agreed at the group’s meeting in October has angered the Biden administration and US lawmakers.
In addition to denying these news reports, Saudi Energy Minister Prince Abdulaziz bin Salman indicated that they are ready to cut production further to balance supply and demand if necessary.
Meanwhile, the Associated Press reported that the southern Chinese city of Guangzhou on Monday locked down its largest district, suspending public transportation and requiring residents to submit a negative test if they want to leave their homes.
The prospect of further restrictions and thus lower demand in China has weighed on crude oil prices recently, amid fears that Beijing and other cities may soon go into lockdown, after China reported its first death from Covid-19 since April over the weekend, according to reports. , as the outbreak continues to worsen and casts doubt on the mutant Xi.
Technical analysis of Crude Oil futures prices – Oil finds some support
The prices of the US light crude oil futures contracts (LIGHT CRUDE OIL FUTURES) on NYMEX advanced slightly during their recent trading on intraday levels, to achieve slight daily gains until the moment of writing this report by 0.36%, to settle at $80.32 per barrel.
This comes after the price relied in yesterday’s trading on the pivotal support level 76.25, which gave it some positive momentum that helped it rebound upwards, in an attempt to compensate part of its previous losses, and drain some of its clear selling saturation with the relative strength indicators, especially with the start of the emergence of A positive intersection with it, in light of the price trading within a range of a bearish corrective price channel that limits its previous trading in the short term, as shown in the attached chart for a (daily) period, with the continued negative pressure of its trading below the simple moving average for the previous 50-day period.
Graph generated by platform TradingView
Therefore, our expectations indicate that oil will rise cautiously during its upcoming trading, provided that the support level 76.25 remains stable, to target the resistance level 85.40.