Solid News

The Downtrend in the Oil Market Continues

12/7/2022 1:07 PM

The price of North American WTI Crude Oil is correcting within a downtrend around 74.40.

All the factors operating on the oil market since the beginning of autumn have been preserved. First of all, this concerns the recent decision of OPEC+ to leave the current parameters for reducing the oil production by 2.0M barrels per day against the background of the expected supply surplus in 2022, which was indirectly confirmed by yesterday's statement by the Russian Deputy Prime Minister Alexander Novak, who announced an increase in oil production in the Russian Federation for eleven months by 2.2%, contrary to the negative forecasts of the International Energy Agency (IEA), which assumed a significant reduction in production in Russia by 10.87M barrels per day to 10.86M barrels per day. In turn, as part of the last meeting of the cartel on December 4, its participants decided to maintain current production plans, despite the introduction by Western countries of the ceiling price level for Russian energy resources at 60.0 dollars per barrel and the ongoing uncertainty in the market: demand may drop significantly from quarantine restrictions in China, and the proposal – if official Moscow decides to take retaliatory measures and stops supplying its resources to countries that supported the introduction of a new pricing mechanism.

As for the local dynamics of American oil, yesterday, the Energy Information Administration of the US Department of Energy (EIA) raised the production forecast for 2022 to 11.87M barrels per day from 11.83M barrels per day, and expectations for 2023 increased to 12.34M barrels per day, which is 30.0K barrels higher than the previous value. According to the agency, global demand for hydrocarbons next year will be 100.82M barrels per day, which is lower than the previous forecast of 100.98M barrels per day. The average price of Brent Crude Oil for 2022 has been reduced to 101.48 dollars per barrel from 102.13 dollars per barrel.

On the daily chart, the trading instrument is moving around the year's low around 74.00, slightly correcting down.

Technical indicators confirm the high probability of further decline, strengthening the sell signal: fast EMAs on the Alligator indicator expand the range of fluctuations, and the AO oscillator histogram forms downward bars, falling in the sell zone.

Resistance levels: 76.30, 81.50. | Support levels: 73.00, 65.41.

Find Us
Registered Address : Bonovo Road – Fomboni Island of Mohéli – Comoros Union
Sofia, PO Box 1407,14 Flip Kutev Str. Floor 2, Industrial area Hladilnika, Bulgaria
Call Us
+35 924 928 392

Risk Warnings
Solid ECN Securities LLC offers trading on Foreign Exchange (‘Forex’ or ‘FX’) and Contracts for Difference (‘CFDs’), which are complex financial products that are traded on margin. They carry a high level of risk since leverage can work both to your advantage and disadvantage. As a result, these products may not be suitable for all investors, as loss of all invested capital may occur. You should not risk more than you are prepared to lose. Before deciding to trade, you need to ensure that you understand the risks involved and consider your investment objectives and level of experience. Seek independent advice, if necessary.
Solid ECN Securities LLC does not issue advice, recommendations or opinions in relation to acquiring, holding or disposing of a CFD. Solid ECN Securities LLC is not a financial advisor and all services are provided on an execution-only basis. This communication is not an offer or solicitation to enter into a transaction and shall not be construed as such.
This website is not directed at any jurisdiction and is not intended for any use that would be contrary to local law or regulation.
By using you agree to use our cookies to enhance your experience.
Solid ECN Securities LLC is authorized and regulated by the Comoros Union with reference number HY00623411.
Disclaimer 1: The information provided on this site is not intended for residents of any country or jurisdiction where its distribution or use would violate local laws or regulations.
Disclaimer 2: Solid ECN Securities LLC and it affiliates does not provide services to residents of the USA, Japan, Canada, Australia, the Democratic Republic of Korea, European Union, United Kingdom, Iran, Syria, Sudan and Cuba.
Copyright All Right Reserved 2024