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WTI Crude Oil Market Update

12/14/2022 10:41 PM

During the Asian session, WTI Crude Oil shows ambiguous dynamics, holding near 75.00.

Yesterday, the instrument renewed local highs from December 6. It retreated from the lows since the end of 2021, near which it was trading on Friday against the backdrop of a large-scale weakening of the US currency in response to the publication of November inflation statistics in the US: the indicator in November slowed down from 7.7% to 7.1%, which was better than market forecasts of 7.3% and confirmed investors' confidence that the US Federal Reserve will soften its "hawkish" rhetoric.

Quotations were additionally supported by expectations of a further reduction in the volume of energy supply on the market: the Russian Federation may take such measures in response to the price limit for Russian oil announced by the G7 countries at 60.0 dollars per barrel. The document, which is being worked on, already reflects several points after which the sale of oil will be prohibited: among them is the presence in the contract as a recipient of a country that has joined the new pricing mechanism, as well as conditions or the establishment of reference prices equal to the limit. It is assumed that the decree will come into force from publication and will be valid until July 1, 2023.

Traders are reacting to upbeat news from China, where the authorities are still trying to relax quarantine measures. Finally, analysts drew attention to reports about the suspension of the oil pumping through the American Keystone oil pipeline, whose capacity is about 620.0K barrels per day.

On the daily chart, Bollinger bands reverse into a horizontal plane: the price range remains practically unchanged, remaining quite spacious for the current market activity level. The MACD indicator keeps a strong buy signal (the histogram is above the signal line). Stochastic shows even more active growth. However, at the moment, it is quickly approaching its highs, indicating that the instrument may become overbought in the ultra-short term.

Resistance levels: 76.00, 78.00, 79.24, 81.00. | Support levels: 74.00, 73.00, 71.00, 70.00.

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