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EU Countries Failed to Agree on a Price Ceiling for Russian Oil

11/25/2022 12:24 PM

The price of North American WTI Crude Oil is correcting in a downtrend around 78.55.

Representatives of European countries could not reach a consensus regarding the establishment of a ceiling on prices for Russian oil, which was provided for by the eighth package of anti-Russian sanctions, which entered into force on October 6. The final meeting was supposed to take place the day before, but according to Bloomberg, the talks were postponed until today or later to allow diplomats to settle differences. It is noted that most EU countries agreed with the values proposed by the European Commission in the range of 65.0-70.0 dollars per barrel; however, representatives of Poland insisted on a more radical reduction, up to 30.0 dollars per barrel, and officials from Greece advocated the maximum the limit is not higher than 70.0 dollars per barrel. Experts believe that politicians are afraid of official Moscow's negative reaction to anti-market regulation, so they are carefully considering the price range for raw materials. Thus, a general solution has not yet been found, and a little more than a week remains until December 5, when the restrictions should come into force.

Additional pressure on quotes is also exerted by reports from China, where on Wednesday 31.656 thousand cases of coronavirus infection were recorded since the beginning of the pandemic, which is a record number. Given the "zero tolerance" policy implemented in the country, investors fear that most of the production centers will be quarantined, which will negatively affect global demand for "black gold".

Also, the local dynamics of the asset was affected by data from the Energy Information Administration of the US Department of Energy (EIA), according to which oil reserves increased by 3.058 million barrels over the week after rising by 2.207 million barrels earlier.

On the daily chart, the price is trading around the yearly low of 76.00, gathering strength to overcome it.

Technical indicators maintain a sell signal: fast EMAs on the Alligator indicator continue to expand the range of fluctuations, and the AO oscillator histogram forms new downward bars, decreasing in the sell zone.

Support levels: 76.00, 71.75. | Resistance levels: 80.10, 84.85.

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