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Brent Crude Oil Price Pressure Remains

2/22/2023 2:01 PM

This week, Brent Crude Oil prices resumed declining and fell to 82.30.

Pressure on quotes is exerted by expectations of the publication of the minutes of the February meeting of the US Federal Reserve: investors are afraid to see hints that the regulator will continue to raise interest rates for a longer period and lead them to higher peak values than previously thought, and in this case, the risks of a decline in the US economy and declining energy demand may rise. Also, fears of a lack of supply due to the limited supply of Russian oil to the market have subsided slightly, which does not contribute to strengthening the asset. According to experts, despite official Moscow's intention to cut crude production by 500,0K barrels in March, the bulk of sales will remain, as they have been redirected from the European market to the Asian one, and a significant deficit is not expected soon.

In the long term, experts hope for the recovery of the Chinese economy, which can significantly increase demand for hydrocarbons: thus, yesterday, the Chinese authorities announced that this year, the country expected a significant increase in domestic tourism, revenues from which could amount to 4.0T yuan (about 580.8B dollars), up 95.0% from 2022. So, short-term negative factors pressure the oil market while the fundamental picture remains positive.

The trading instrument is within the medium-term ascending channel, dropping below 82.81 (Murrey level [5/8]), which opens the way for a further decline to 80.00 (lower limit of the ascending channel, the lower line of Bollinger bands) and 78.12 (Murrey level [1/ 8]). A reverse breakout of 84.38 (Murrey level [6/8], the middle line of Bollinger bands) will ensure the resumption of growth to 87.50 (Murrey level [8/8]) and 90.62 (Murrey level [+2/8]).

Technical indicators do not give a single signal: Bollinger bands are reversing downwards, the MACD histogram is near the zero zone, its volumes are insignificant, and Stochastic may reverse upwards from the oversold zone soon.

Resistance levels: 84.38, 87.50, 90.62. | Support levels: 80.00, 78.12.

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