Oil price call points
The oil price protects progress from a monthly low ($ 65.01) during a larger-than-expected decline in U.S. inventories, and crude oil may continue to follow the decline from its highest level of the year ($ 76.98) as it trades back over a 50-day SMA ($ 70.55).
The return to oil prices is based on the decline in US crude oil stocks
The oil price trades close to the weekly high ($ 72.60) as US stocks hit 4.089 million versions in the week ending July 23, compared to forecasts of 2.928 million, and crude oil may continue its upward trend earlier this year, even ifOrganization of the Petroleum Exporting Countries (OPEC) agree to increase production “by 0.4 MB / d per month from August 2021.“
Developments suggest that the increase of 2,108 million in the week ending 16 July may have been a one-off event, as demand is expected to improve in the second half of the year and data printouts could keep OPEC and its allies at a pre-set US rate.
A closer look at the Energy Information Agency’s (EIA) figures showed that weekly agricultural production fell to 11,400,000 in the week ending 11 July, and that a modest recovery in US production could help keep oil prices afloat, like OPEC. The newest Monthly Oil Market Report (MOMR) emphasizes that “global oil demand is projected to grow by 6.0 mb / d in 2021, unchanged from last month’s estimate”.
That being said, the price of oil could fall will continue the upward trend at the beginning of this year as signs of stronger demand will be met by limited supply and crude oil may keep track of the decline from the peak of the year ($ 76.98) as it trades back above the 50-day SMA ($ 70, $ 55).
Oil price chart
Source: Trading View
- Keep in mind that crude oil left the range of limited pricing from the third quarter of 2020 as it created an upward channel, oil price, which brought the highest level in 2019 ($ 66.60) in terms of both the 50-day SMA ($ 70.55) and the 200-day SMA ($ 57.72)established positive slope.
- Oil prices may continue to rise rally earlier this year removes the danger of double-top formation, however lack of momentum for testing the 2018 peak ($ 76.90) pushed crude below the 50-day SMA ($ 70.55), together Relative Strength Index (RSI) setting a downward trend after the textbook sales signal flashed earlier this month.
- However, there was no momentum to close below $ 65.40 (23.6% expansion) range is the price of oil back higher 50-day SMA ($ 70, $ 55) but you need a break / close above the $ 74.40 (50% expansion) zone to open the $ 76.90 (50% retracement) area, which is largely in line with July high ($ 76.98).
– Written by David Song, currency strategist
Follow me on Twitter at @DavidJSong