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WTI Crude Oil Trades Near the Year’s Low

11/30/2022 1:51 PM

The price of North American WTI Crude Oil is correcting the uptrend around 79.10.

The key factor determining the direction of dynamics in the oil market remains the discussion of the maximum price level for Russian oil, which has not yet been agreed upon. Despite additional negotiations and consultations, the Baltic countries and Poland strongly oppose the introduction of a limit of 65.0–70.0 dollars per barrel, insisting on a range of 30.0–40.0 dollars per barrel. The desire of the leading European countries to set a limit is natural since, despite public statements about the refusal to purchase Russian energy resources, it is virtually impossible to do without them, and the high cost will allow them to hope that official Moscow will continue to supply energy resources further. However, yesterday, Deputy Prime Minister of the Russian Federation Alexander Novak denied this assumption, saying that the government would stop cooperating with countries that supported the new pricing mechanism and intended to work only on market conditions while not ruling out a possible reduction in oil production if the offer exceeded demand. The head of the International Energy Agency, Fatih Birol, also pointed to the fall in oil production in Russia and suggested that in the first quarter of 2023 it could reach –2.0M barrels per day.

The price was supported locally by data from the American Petroleum Institute (API), according to which US inventories decreased by 7.850M barrels instead of the expected decline of 2.487M barrels.

On the daily chart of the asset, the instrument is moving around the year’s low of 76.00, slightly correcting upwards.

Technical indicators confirm the likelihood of a local correction, weakening the sell signal: fast EMAs on the Alligator indicator narrow the range of fluctuations, and the AO oscillator histogram forms rising bars, decreasing in the sell zone.

Resistance levels: 81.00, 86.60. | Support levels: 77.35, 73.65.

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