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Brent Crude Oil Quotes Update Local Lows

12/8/2022 11:33 AM

Brent Crude Oil is trading near 78.00, trying to correct after a four-day downtrend. The instrument has been holding near local lows since the beginning of the year, under pressure from reports from China, whose authorities announced the easing of quarantine restrictions amid a decrease in the incidence. In particular, those infected with mild symptoms will be able to self-isolate at home, and it is also planned to abandon the testing of travelers within the country, which will help restore the economy of the world's first oil consumer.

Noticeable pressure on quotes the day before was exerted by the report from the US Department of Energy on the dynamics of oil stocks. For the week ended December 2, the volume of oil in storage facilities decreased by 5.187 million barrels after a sharp decline of 12.58 million barrels over the past period, while distillate stocks added 6.2 million barrels (forecasts assumed an increase of 2.2 million barrels), and gasoline stocks gained 5.3 million barrels, while analysts had expected an increase of only 2.7 million barrels.

Meanwhile, the Russian authorities have developed three scenarios for retaliatory steps to setting a price ceiling of 60.0 dollars per barrel for "black gold" exported from the country. Among the "mirror" measures is a ban on the sale of energy to states that supported the initiative, including through intermediary countries; a ban on the sale of raw materials under contracts that include a price limit as a condition, regardless of which country is indicated in them as a recipient, and also the introduction of the maximum discount for the sale of Urals brand to Brent Crude Oil. It is noted that so far none of the scenarios has been approved, and experts are sure that the limit will only lead to an increase in the price of raw materials on the market.

Pressure on Brent Crude Oil quotes was also exerted by negative forecasts from US banks, which spoke in favor of a scenario with a worsening economy next year. In particular, financial giants JPMorgan Chase & Co., Bank of America Corp. and Goldman Sachs Inc. expressed concern about high inflation and a sharp increase in interest rates, which most significantly affected only the dynamics of consumer demand.

Bollinger Bands in D1 chart demonstrate a stable decrease. The price range is expanding but it fails to conform to the surge of "bearish" activity at the moment. MACD is going down preserving a stable sell signal (located below the signal line). Stochastic, having reached its lows, reversed into a horizontal plane, signaling in favor of the possible development of corrective growth in the nearest time intervals.

Existing short positions should be kept in the short and/or ultra-short term until the signals from technical indicators clear up.

Resistance levels: 78.78, 80.00, 81.00, 82.27. | Support levels: 77.00, 75.63, 74.00, 72.00.

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