Crude oil, Delta option, stock levels, IEA report – call points
- Raw and Brent oil benchmarks for weekly increases after overnight profits
- U.S. environmental impact assessment oil and gas reserves fell last week, disappointingly
- Prices are focused on the psychological 70 handles, but the 9-day EMA is upside down
Crude oil prices appear to be just below $ 70 a barrel after rising overnight, despite a disappointing US inventory report. Brent reference prices have also followed an almost identical path over the last 24 hours. Oil prices have fallen in recent weeks as Delta’s Covid fears drew a broader market sentiment. Although these fears have recently subsided, oil prices will remain at a multi-year high in July.
The U.S. government’s Energy Information Administration (EIA) said inventories fell 0.47 million barrels overnight by the week of August 6. While declining inventories show that demand exceeded supply, analysts were expecting a nearly triple draw. Petrol stocks also fell, declining by 1.4 million barrels for the same EIA report. However, this also did not meet analysts’ expectations. Nevertheless, oil prices rose after disappointing figures.
This may be due to softer US dollar. Globally, oil is traded and traded largely using currency. It is most commonly referred to as the petrodollar system. When the US dollar depreciates, it makes it cheaper for foreign entities to buy oil. The DXY index, which tracks the basket of Greenback and major currencies, fell below 93 overnight. Although the weekend is still up, the silence of the night wind may have encouraged the purchase of oil.
In the meantime, high gas prices have come to the attention of the US government. President Joe Biden has publicly called on OPEC countries to accelerate cuts in oil production. These cuts were introduced in early 2020 in response to the sharp fall in energy prices caused by the Covid pandemic, which destroyed global demand. The US administration is taking other measures, including reviewing the difference between oil and gas price changes during price changes.
In general, the outlook for crude and brent oil and other raw materials strongly affected by consumer demand is unclear. Although supply is growing slowly but surely between OPEC and other countries, the highly transferable Delta strain threatens to worsen the energy market. China is facing occasional outbreaks, while Australia is still densely populated in its densely populated areas.
Elsewhere, increasing hospital care, such as in parts of the United States, is forcing policy makers to implement social exclusion measures. Fear is becoming tangible despite the high vaccination rate in the United States. On August 10, the Transportation Security Administration (TSA) reported only 1.72 million passenger capacity. This is the lowest number of passengers in the United States since the beginning of July. Looking ahead to this week, energy traders should keep an eye on the International Energy Agency’s monthly oil market report.
Technical prospects for crude oil
The March support trend line supported the latter lower step, with a 100-day moving mobile average (SMA) increase, which provided some uniform support. At present, the 9-day exponential moving average (EMA) seems to be pushing prices down. When there is a pause above the EMA, the psychologically imposing level 70 represents the next obstacle to moving higher. Alternatively, reversing the downtrend would bring the rising trend back into focus.
Crude oil daily schedule
The chart has been created TradingView
Crude Oil Trade Resources
– Written by Thomas Westwater, DailyFX.com analyst
Be in touch Thomas, use the comments section below, or @FxWestwaterTwitter