Quotations of Brent Crude Oil rose to 90.00 against the background of the upcoming reduction in oil supply on the market.
Sanctions against Russian oil imposed by the European Union will come into force on December 5 and will include a ban on its oil transportation to third countries at prices above the established limit. It is noted that representatives of European states have already agreed on a legal basis for restrictions, while members of the G7, for their part, are discussing a likely maximum cost of a barrel around 40.0–60.0 dollars. The most important point of the agreement is a ban on European insurance and shipping companies from servicing Russian tankers that transport oil at a price above the established limit. Against this background, the authorities plan to create a monitoring system to implement established rules.
Currently, the total volume of supplies from Russia has fallen to a nine-week low of 2.67M barrels per day. Deputy Prime Minister Alexander Novak stressed yesterday that if a price ceiling consolidates, Russia will redirect supplies or even reduce production, which, in his opinion, will create an even greater shortage of resources. In turn, the EU authorities proposed establishing a 45-day transition period after the introduction of the embargo to avoid strong jumps in the oil market and allow participants to adapt to changing parameters.
Brent crude oil quotes react to the fundamental background with positive dynamics: a decrease in supply leads to a rise in the price of goods in conditions of increased demand. While the markets are being rebuilt, the asset will probably continue to grow towards 99.00.
The long-term trend is down. On Monday, the “bears” unsuccessfully tried to break through the support level of 83.50, as a result of which the price of the trading instrument rose to 90.00 and is preparing to continue the upward trend to 90.50, and if it is held, the quotes will fall to 83.50, and in case of its breakdown, the asset will try to test the trend line at 99.50.
The medium-term trend remains downward. This week, market participants unsuccessfully tried to overcome the target zone 2 (85.70–84.95), as a result of which a correction began, within which the price reached the key resistance range of 90.92–90.17, from where it is worth considering new short positions in the asset with the target at the weekly low of the week 82.90. After the consolidation above 90.92, the trend will change to an uptrend.
Resistance levels: 90.50, 99.50. | Support levels: 83.50, 77.00.