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Crude oil under pressure

8/9/2022 2:34 PM

Quotes of Brent Crude Oil started the week with growth and rose to the area of 98.40. The price won back losses against the backdrop of positive economic data published in the US and China.

The US labor market continued to show strong results in July: Nonfarm Payrolls increased by 528.0 thousand, and the Unemployment Rate fell to 3.5%, which allows experts to assert that the national economy has not yet entered a recession or that it will not be too deep. In turn, the growth of Chinese Exports in July by 18.0% also encouraged investors who expect that the negative impact of the coronavirus pandemic on production in China is decreasing.

Positive signals pushed the price up, but today it may start to decline again. The market is worried about the conclusion of a nuclear deal between Iran and Western countries. The day before, the EU representatives announced the development of the final text of the treaty, which must now be approved in Tehran and Washington. The deal can be concluded within a few weeks, and Iran in the next six months will be able to increase production by 1.0-1.5 million barrels per day. Nevertheless, experts consider such calculations too optimistic.

Today, investors are waiting for the publication of a weekly report on the amount of oil reserves in the United States from American Petroleum Institute (API). The last time the indicator rose by 2.165 million barrels and the continuation of this trend may put additional pressure on quotes.

The price is testing the level of 96.88 (Murray [-1/8]), consolidation below which will give the prospect of further decline to the levels of 93.00 (Fibonacci retracement 61.8%, Murray [-2/8]) and 90.00. The medium-term downtrend continues, as evidenced by the downward reversal of Bollinger Bands and the stabilization of MACD histogram in the negative zone. The reversal of Stochastic upwards in the oversold zone does not exclude the beginning of growth to the area of 103.00 (the center line of Bollinger Bands, Murray [1/8]), but is unlikely to lead to a trend reversal.

Resistance levels: 100.00, 103.00, 106.25. | Support levels: 96.88, 93.00, 90.00.

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