Oil fell for the second time in a week, undermining Saudi Arabia's attempts to maintain prices. Initially, the decision by the OPEC leader to cut production by 1 million barrels per day in July led to a short-term rise in the price of oil. However, according to analysts at Citigroup Inc. the decline in production does not solve the problem of weak demand.
Macroeconomic factors continue to put downward pressure on the price of the energy source: the weak recovery of the Chinese economy, the risk of interest rate hikes by the Fed, and robust Russian exports.
According to S&P Global Commodities at Sea, in May, Russian offshore oil exports reached their highest level since the end of February 2022. The average supply was 3.87 million barrels per day. At the same time, before the beginning of 2022, the figure was about 3.1 million barrels per day.
The OPEC+ alliance obliged Moscow to extend its oil production reduction by 500,000 barrels per day starting from March. However, S&P Global reports that supplies continue to rise.
India imported 2 million barrels per day from Russia last month, which exceeds April's level by 14% and is a new record for shipments to the country. Exports to China declined, but shipments to Turkey increased sharply. Exports to China declined, but shipments to Turkey rose sharply. Shipments to Turkey reached a seven-month high. Thus, South Korea lost its third place in terms of imports from Russia.
Russian Federation does not confirm the increase in oil production, saying that it complies with the agreements accepted at the OPEC+ meeting. However, large supplies of energy sources to the Asian market reduce the price of oil.
Nevertheless, analyst of Commonwealth Bank of Australia Vivek Dhar believes that the reduction of Saudi Arabia's production in the future will still affect the market and lead to a shortage of supply.
Prices of Brent crude oil are forming a corrective corridor with a range of 71.50 - 78.51 on the H4 timeframe. The price pulled back from the upper boundary, signaling a price movement to corridor support.
Signal:
The short-term prospects for Brent are to sell.
The target is at the level of 72.05.
Part of the profit should be fixed near the level of 74.25.
The stop-loss is at the level of 78.70.
"Bearish" trend has a short-term character, so the volume of trade should not exceed 2% of your balance.
This content is for informational purposes only and is not intended to be investing advice.
