Solid News

The Oil Market is Correcting Upwards

3/30/2023 12:12 PM

Despite an outflow of investment capital into the metal group's assets, benchmark Brent Crude Oil prices are correcting, trading just above last year's December lows of 77.00.

The key topic for discussion remains the agreement between Russia and China, according to which it is planned to transfer all oil and gas contracts in yuan, eliminating settlements in the US dollar. Saudi Arabia is also considering a similar scenario when conducting trade transactions with Chinese partners, and the recent deal between the China National Offshore Oil Corp. and the French TotalEnergies SE for the supply of liquefied natural gas in the amount of 65.0K tons, carried out in yuan. Thus, the dollar's influence on oil quotes weakens.

Macroeconomic data had a local impact on the asset. After four weeks of gains, including a 3.262M barrel increase last week, the American Petroleum Institute (API) reported a 6.076M barrel decline in oil inventories. The subsequent publication of the Energy Information Administration of the US Department of Energy (EIA) confirmed the correction of the value of –7.489M barrels after an increase of 1.117M barrels earlier. Thus, the overall figure fell to 473.7M barrels.

On the daily chart, the trading instrument is falling within the global downward corridor with dynamic boundaries of 84.00–64.00.

Technical indicators are reversing upwards: fast EMAs of the Alligator indicator are approaching the signal line, narrowing the range of fluctuations, and the AO histogram is forming rising bars in the sell zone.

Resistance levels: 79.70, 86.10. | Support levels: 75.40, 70.10.

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