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WTI Crude Oil Market Update

8/10/2022 12:55 PM

WTI Crude Oil traded near 89.50 during the morning session.

Activity on the market remains quite low, as market participants prefer to wait for the publication of macroeconomic statistics on the dynamics of consumer inflation in the US. Forecasts suggest that the indicator will recede from its peak values of 9.1%. In addition, during the day, the US Federal Reserve will publish a monthly report on the state of the national budget. It is likely that the policy of raising interest rates will continue, but today it is important for investors to understand the rate of correction of the value in order to analyze the risks of a recession.

In turn, quotes are supported by news about new restrictions on the supply of Russian oil to Europe. Earlier it became known that the Ukrtransnafta company suspended pumping from Russia to the southern direction of the Druzhba gas pipeline. Thus, the supply of "black gold" to Hungary, the Czech Republic and Slovakia was blocked. As an argument, the Ukrainian company announced the impossibility of payment from Russia in the context of EU sanctions. In addition, the market expects official Tehran to return to negotiations on the nuclear program in the near future, agreeing with the proposals of the European Union, which will also become a catalyst for an increase in energy prices.

Analysts at the investment bank Goldman Sachs Group Inc. adjusted preliminary estimates for the cost of Brent Crude Oil from 140.0 to 110.0 dollars in the third quarter amid the deteriorating economic situation in the world, the risks of resuming coronavirus restrictions in China, where new outbreaks of the disease are periodically recorded, as well as the restoration of oil production in Russia. Nevertheless, experts do not exclude the resumption of the uptrend in the asset, despite the recent correction. They did not change the cost forecast for the next year, leaving the figure in the area of 125.0 dollars per barrel.

Bollinger Bands in D1 chart demonstrate a moderate decrease. The price range expands from below, making way for new local lows for the "bears". MACD is growing preserving a weak buy signal (located above the signal line). Stochastic is showing similar dynamics, signaling in favour of the development of the "bullish" trend in the ultra-short term.

Resistance levels: 90.00, 91.93, 93.97, 96.00. | Support levels: 86.95, 85.00, 83.00, 81.00.

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