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Prices for "Black Gold" are Under Pressure Again

9/7/2022 12:51 PM

During the Asian session, WTI Crude Oil quotes show a downward trend, testing 85.00 and renewing local lows from the end of January.

The pressure on the trading instrument is still exerted by growing concerns about a rapid decline in demand for oil and oil products. Europe, plunging into a full-fledged energy crisis, is taking measures to artificially reduce consumption, while the Chinese economy is again facing lockdowns amid a zero-tolerance policy for COVID-19. The issue of fuel supplies from Russia adds uncertainty to the market since the supply chains have been disrupted under the sanctions. Moreover, the G7 countries have previously agreed to impose an upper price limit on Russian energy exports by sea. However, how exactly this will affect price dynamics is still unknown.

Against the background of the news about the demand reduction, the markets paid little attention to the decision of OPEC+ not to increase production volumes by another 100.0K barrels per day in September, but this value is really small to affect the market dynamics significantly. It is worth noting that the actual production of the alliance is almost 3.0M barrels below the target levels.

On Wednesday, the focus of investors will be the report of the American Petroleum Institute (API) on US oil inventories for the week of September 2. Recall that the previous report reflected a poor increase in the indicator by 0.593M barrels.

On the daily chart, Bollinger bands are moving in a flat: the price range is expanding, however, not as fast as the "bearish" dynamics develop. The MACD indicator is falling, keeping a poor sell signal (the histogram is below the signal line). Stochastic, having retreated from its lows, is trying to reverse upwards, indicating that the instrument is oversold in the ultra-short term.

Resistance levels: 86.95, 90.00, 91.93, 93.97. | Support levels: 85.00, 83.00, 81.00, 80.00.

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