Oil price talk points
oil price bounces back from fresh weekly low ($ 67.61) trying to follow the downturn following the unexpected rise in U.S. inventories, but recent pricing poses a tough outlook for crude oil as it prolongs a series of lower ups and downs from the start of the week.
Oil prices are low in July as the bear price range remains intact
oil price has fallen below its 50-day SMA ($ 71.34) for the first time since May after posting losses for three consecutive days, and crude oil appears to be on track to test its July low ($ 65.01) as US inventories rise to $ 3.626 million in a week ended 30 July versus 3.102 million decline forecast.
Signs of a slowdown in demand could lead to a larger correction in oil prices Organization of the Petroleum Exporting Countries (OPEC) agree to increase production by “0.4 MB / d per month from August 2021,“ but continued weakness in U.S. production may support crude oil as it falls below pre-pandemic levels.
A closer look at the Energy Information (EIA) figures showed that weekly agricultural output was 11,200K in the second week and signs of limited supply could keep oil prices last in OPEC. Monthly Oil Market Report (MOMR) stresses that “tpositive developments in pandemic containment and strong global expectationseconomic growth is expected to boost oil consumption in 2022. “
The price of oil, in turn, may follow the previous month’s range ahead of the next Annual OPEC and non-OPEC ministerial meeting On September 1, in the middle of a mixed printout of data from the US, however recent price measures put the crude oil outlook, as it prolongs the series of lower ups and downs from the beginning of the week.
With this in mind, a larger correction in oil prices can be expected if it falls back below the 50-day SMA ($ 71.34) and crude oil may take signs of declining demand to try the July low price ($ 65.01).
Daily schedule of oil prices
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.
- The broader outlook for crude oil remains constructive The rally earlier this year eliminated the risk of double formation, but the lack of momentum to test the highest level in 2018 ($ 76.90) pushed crude below the 50-day SMA ($ 71.34), together with Relative Strength Index (RSI) setting a downward trend after the textbook sales signal flashes July.
- The price of oil will prolong the series of prices falling earlier this week as it rises Fibonacci overlap between about $ 70.40 (38.2% expansion) and $ 71.50 (38.2% expansion), but another failed attempt to close the region below $ 65.40 (a 23.6% expansion) could keep crude oil within a specified range.
- At the same time pause below July Low ($ 65.01) opens the $ 62.70 (61.8% retracement) region to the $ 62.90 (78.6% expansion) region, with the next region of interest being about $ 60.30 (38.2% retracement).
– Written by David Song, currency strategist
Follow me on Twitter at @DavidJSong