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Reducing US Oil Inventories Makes the Prices Grow

8/25/2022 4:14 PM

Brent crude oil quotes rose above 100.0 dollars per barrel for the first time since August 12, reaching a resistance level in the 102.00 area after the publication of US statistics and reports of production cuts by OPEC+ members.

According to the American Petroleum Institute (API), crude stocks fell by 5.632M barrels, well below the forecast of 0.450M barrels and the previous value of 0.448M barrels. A similar report from the Energy Information Agency (EIA) also showed a decline of 3.282M barrels, lower than the forecast of –0.933M barrels but higher than the previous value of –7.056M barrels.

Also, the energy quotes are supported by reports that OPEC+ representatives are ready to reduce production if cheap Iranian oil is brought to the market after the signing of the “nuclear deal” by official Tehran and Western countries.

Against this background, the quotes of the trading instrument went into an upward correction and reached 102.00, after the breakdown of which the movement will continue to 110.00. However, the long-term trend is still downwards. If this level is kept, the decline in the asset will increase to the area of ​​93.55.

The medium-term trend is down, and the price is testing the border of the corridor of 102.30–101.45. If it is held, the decline will continue with the target at the August low at 93.20. Otherwise, the market expects a trend change to an uptrend, and zone 2 (110.80–109.95) will become the target for purchases.

Resistance levels: 102.00, 110.00. | Support levels: 96.24, 93.55.

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