Quotes of Brent Crude Oil failed to break the resistance level of 85.00 and are currently falling to the 82.80 area amid the resumption of work of oil refineries on the coast of the Gulf of Mexico after the weakening of the snowstorm. Extreme cold temperatures and heavy snowfall have disrupted about a dozen businesses, cutting oil and gas production from North Dakota to Texas.
So, over the Christmas weekend, production fell by 450.0K–500.0K barrels of oil per day at the fields of the Bakken formation, the Industrial Commission of North Dakota reported. Forecasters predict that the weather will improve this week in the US, which means that enterprises will be able to reach full capacity, which will return supply to its previous level and help reduce energy prices.
Also, this week Russian President Vladimir Putin signed a decree banning the export of oil and oil products to countries and organizations that supported the establishment of a price ceiling of 60.0 dollars per barrel in response to the escalation of the military conflict in Ukraine. The retaliatory measures against oil will be valid from February 1 to July 1, 2023, while for oil products, the date will be determined by the government soon. It is worth noting that the document contains a clause on the possibility official Moscow issuing special permits to circumvent restrictions. While the markets are evaluating the possible consequences of the Russian government's retaliatory measures, Brent Crude Oil quotes may continue to decline until 76.00.
The long-term trend remains downwards. After the breakout of 85.00, the price started a correction, the target of which is the December low of 76.00, which breakdown allows the instrument to continue moving to the area of 69.70.
The medium-term trend, in turn, changed to an upward trend this week. The price has broken through the key resistance level around 82.57–81.90, and now the upside target is the area of 89.27–88.60. At the moment, we can observe a correction to test the key support of the new trend at 79.08–78.41, after which the traders will have the opportunity to consider long positions with the target at the high of the current week at 85.70.
Resistance levels: 85.00, 90.50. | Support levels: 76.00, 69.70.