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Saudi Arabia Raises Arab Light Prices for Asian and European Consumers
3/7/2023 11:09 AMDuring the Asian session, the price of WTI Crude Oil is developing a bullish trend, formed on February 23, and is testing 80.80 for a breakout, renewing local highs of January 27.
The quotes are supported by expectations of the outcome of the speech of the head of the US Federal Reserve, Jerome Powell, who may clarify the prospects for further actions of the regulator: the next meeting will be held at the end of March, and current forecasts suggest that the interest rate will be increased by 25.0 basis points. Representatives of the department have repeatedly noted that it is still premature to talk about the approaching of the current cycle of monetary policy tightening to the end, and a few more increases in the indicator may be required, which will remain at high levels for a long time.
Meanwhile, for the second month in a row, Saudi Arabia has adjusted prices for Asian and European consumers for Arab Light oil by 2.50 dollars per barrel above the regional benchmark and 0.50 dollars per barrel above the March value: for buyers in Northwest Europe, the cost will increase by 1.0 dollars per barrel, and for the Mediterranean – by 0.3 dollars per barrel relative to Brent Crude Oil. According to Bloomberg, the changes were introduced in response to a strong recovery in the Chinese economy after the easing of coronavirus restrictions and the authorities’ gradual abandonment of the “zero tolerance” policy for COVID-19, also, the decision was influenced by forecasts of increased demand for “black gold” and a slowdown in global inflation. China has set a gross domestic product (GDP) growth target of 5.0%, the lowest level in 30 years, and is expected to have a budget deficit of 3.0% this year.
The focus of investors on Tuesday will also be the publication of the report of the American Petroleum Institute (API) on oil reserves for the week of March 3: the previous report reflected a sharp increase in the index by 6.203M barrels.
On the daily chart, Bollinger bands are growing slightly: the price range is expanding but at the moment it is not keeping with the surge of the “bullish” sentiment. The MACD indicator is growing, keeping a relatively strong buy signal (the histogram is above the signal line). Stochastic keeps its upward direction but at the moment it is near its highs, indicating that the asset may become overbought in the ultra-short term.
Resistance levels: 81.00, 82.00, 82.62, 83.50. | Support levels: 79.81, 78.74, 78.00, 77.00.
