After yesterday's noticeable decline against the release of the February protocols of the American regulator, the prices for WTI Crude Oil are slightly correcting around 74.33.
The published reports reflected the readiness of the US Federal Open Market Committee (FOMC) to raise interest rates until inflation reaches the target level of 2.0%. At the last meeting, the agency increased the figure by 25.0 basis points, and a similar decision is expected during the March meeting next week. At the same time, the value is approaching the psychological level of 5.0%, and upon reaching it, in the presence of a favorable macroeconomic background, officials can take a wait-and-see attitude. The pressure on the asset, in turn, is exerted by concerns about the pace of global economic recovery: the struggle of world regulators with inflation is slightly delayed, and interest rates have been at restrictive levels for a long time, holding back the growth of consumption and general activity.
Another negative factor for the trading instrument was the publication of the report of the American Petroleum Institute (API) on the dynamics of energy reserves on February 17: the figure increased sharply by 9.895M barrels after a record increase of 10.507M barrels earlier.
Meanwhile, according to Bloomberg reports, the export of "black gold" and fuel oil from Russia to China renewed the maximum of April 2020, reaching 1.66M barrels per day, while the supply of crude oil and condensate rose to 1.52M barrels. per day. The positive trend is facilitated by the recovery of the Chinese economy after the lifting of coronavirus restrictions, as well as the active discount policy of the Russian authorities. However, the Urals price discount to Brent Crude Oil should decrease, helped by changes in national legislation in terms of mineral extraction taxation, value added tax, and reverse oil excise. In particular, the proposed discount from April to July will be gradually adjusted from 34.0 dollars per barrel to 25.0 dollars per barrel.
On the daily chart, Bollinger bands are moving flat: the price range remains practically unchanged, limiting the further development of the “bearish” dynamics from below in the short term. The MACD indicator is going down, keeping a strong sell signal (the histogram is below the signal line). Stochastic keeps a confident downward direction but is close to its lows, indicating that the instrument may become oversold in the ultra-short term.
Resistance levels: 75.00, 76.00, 77.00, 78.00. | Support levels: 74.00, 72.45, 71.00, 70.00.