During the Asian session, Brent Crude Oil prices show ambiguous dynamics, holding near 80.00.
Yesterday, the quotes won back part of the losses of the end of last week against the backdrop of slight investor optimism, which supports stock markets and highly profitable and risky currencies. Despite the continued rise in the incidence of COVID-19, the stimulating policy of the Chinese authorities in terms of easing quarantine restrictions improves the prospects for energy demand. Thus, according to Kayrros analysts, in just two weeks, the demand for aviation fuel increased by 75.0%, or almost 170.0K barrels per day, as earlier there were reports in the media about China's readiness to increase the number of flights to restore the average daily volume of passenger traffic in the country is up to 70.0% of the 2019 level. The country's government calls the restoration and expansion of hydrocarbon consumption one of the main priorities for 2023.
Quotations are supported by restrictions aimed at the import of Russian oil by Western countries. Yesterday, the EU leaders agreed to impose a limit on gas prices after a similar measure for oil. Investors fear new bans could trigger another supply crisis as official Moscow tries to reorient its markets towards Asia.
The focus of investors on Tuesday will be the American Petroleum Institute (API) report on oil stocks: the previous data reflected a sharp increase in stocks by 7.819M barrels after falling by 6.426M barrels earlier. The US intends to buy energy to restore strategic reserves, 180.0M of which were brought to the market this year by President Joe Biden to mitigate the sharp increase in gasoline prices in the country. According to the US Department of Energy, the size of the first batch, scheduled for February next year, will reach 3.0M barrels.
On the daily chart, Bollinger bands are actively declining: the price range is rapidly narrowing, reflecting the emergence of ambiguous trading dynamics in the short term. The MACD indicator is growing, keeping a poor buy signal (the histogram is above the signal line). Stochastic, on the contrary, keeps a confident downward direction and practically does not react to the attempt of corrective growth at the beginning of the current week.
Resistance levels: 81.00, 82.27, 83.89, 85.15. | Support levels: 80.00, 78.78, 77.00, 75.63.