On Tuesday, oil weakly grew during morning trading. The US CPI report will be released today. Good data is needed for the growth of risky assets, including oil. Most likely, the decline in inflation will slow down month by month.
The news background today is on the side of the bears. However, oil ignores this news and rises in anticipation of statistical data.
The Energy Information Administration (EIA) expects record production volumes from the seven largest US shale deposits. Oil exports have also resumed at Turkey's key terminal after an earthquake that rocked the region. As a result, the market's fears concerning the shortage of supply begin to weaken.
On the other hand, utility companies plan to use more natural resource reserves from the Strategic Petroleum Reserve (SPR) than previously expected. The US Department of Energy has announced the sale of 26 million barrels of oil from the SPR, which will likely bring inventories to their lowest level since 1983.
According to representatives of the OPEC countries, the oil rally may start again this year. This is primarily due to the growth in demand in China after the removal of anti-COVID restrictions. Afshin Javan, Iran's representative in OPEC, said that in the second half of 2023, the price of oil could rise to $100. Another five OPEC representatives, in private conversations with Reuters, expressed the opinion that the price will rather grow and not fall this year, and two were expecting it to return to $100.
Representatives of OPEC aren't unanimous in their opinion on the price of oil. Nevertheless, all forecasts come down to price growth only in the second half of the year.
According to technical analysis, oil is trading in a slightly sloping uptrend. Quotes are now in the middle of this trend, considering the negative news background, you can try to open short positions with a short stop. A movement to the upper limit of the trend is restricted by the 200-day Moving Average.
The target of the decline will be support presented, as the lower boundary of the uptrend. The 0.5 Fibonacci level is located here from the entire growth wave. Thus, the target will be $82.2. A stop-loss can be placed during the update of the current local highs of around $89.4.
Decrease of Brent:
Take profit – $82.2
Stop-loss – $89.4
This content is for informational purposes only and is not intended to be investing advice.
