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OPEC Predicts Growth in Oil Demand in the First Quarter

1/20/2023 11:00 PM

During the Asian session, prices for WTI Crude Oil show ambiguous dynamics, holding near 81.00 and local highs of December 5, renewed last Wednesday.

Experts are counting on a significant increase in oil demand from China, which has recently begun to lift quarantine restrictions, which should positively impact the work of industrial enterprises and the restoration of disrupted supply chains around the world. The country has recently been actively increasing oil purchases, including Russian ones, which are offered at a significant discount, which, according to analysts from the International Energy Agency (IEA), will lead to an increase in world demand by 1.9M barrels per day to a record 107.0M barrels per day, and sanctions against the Russian Federation will further reduce the supply on the market.

Against this background, OPEC representatives improved the forecast for world oil demand in the first quarter by 160.0K barrels per day, but expectations for 2022 and 2023 remained unchanged at 99.55M barrels per day and 101.77M barrels per day, respectively. In turn, pressure on quotes was exerted by data from the Energy Information Administration of the US Department of Energy (EIA), which reflected a sharp increase in oil reserves for the week of January 13 by 8.41M barrels to 4483.02M barrels against forecasts for a decrease by 1.75M barrels. Over the past reporting period, the increase in the indicator amounted to 18.962M barrels and gasoline – 3.48M barrels, which was higher than analysts' forecasts of a rise of 2.4M barrels.

On the daily chart, Bollinger bands are moving flat: the price range is expanding from above, letting the "bulls" renew local highs. The MACD indicator grows, keeping a relatively strong buy signal (the histogram is above the signal line). Stochastic keeps a confident downward direction and practically doesn't react to yesterday's growth attempt.

Resistance levels: 81.00, 82.00, 82.62, 83.50. | Support levels: 79.81, 78.74, 78.00, 77.00.

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