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Oil Market is Stable Despite Negative IMF Forecasts

1/31/2023 12:28 PM

Benchmark Brent Crude Oil prices correct slightly above 83.65.

Yesterday, the International Monetary Fund (IMF) provided a detailed report on the prospects for the global economy for the next two years, in which special attention was paid to the energy market: according to experts, oil quotes will decrease in 2023 by 16.2% and will average 81.13 dollars per barrel, and in 2024 – by another 7.1% to 75.36 dollars per barrel. Analysts of the agency base their assumptions on the slower pace of global economic recovery, due to which the growth rate of demand for fuel will be lower. It is also emphasized that against sanctions imposed by the G7 countries on setting a price ceiling, the export of “black gold” from Russia decreased in December by 22.0% to 2.5M barrels. However, with the current limit, the volumes will not be significantly adjusted since trade is now redirected to new markets, notably China and India.

The sharp increase in demand for oil-based exchange contracts, which was recorded in the first week of January, continued last week, and the number of net speculative positions in the asset increased to 249.8K from 239.2K, so over the past week, the number reached 249.8K from 205.2K earlier, which in the end can act as a catalyst for strengthening the upward dynamics in the asset.

On the daily chart, the trading instrument moves within a downward corridor, approaching the corridor resistance line at 87.00.

Technical indicators weaken the buy signal: fast EMAs of the Alligator narrow the fluctuation range and approach the signal line, while the AO histogram forms downward bars, falling in the buy zone.

Resistance levels: 87.00, 94.50. | Support levels: 82.50, 76.70.

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