WTI downward correction might begin in the near term

19 April 2023 218
WTI downward correction might begin in the near term

The Iraqi government and Kurdistan Region authorities agreed to restore oil supplies through the pipelines from the northern part of the country to the Turkish port of Ceyhan. According to this agreement, oil companies will restart production after Turkey paused oil exports from northern Iraq in March.

This agreement on restoring oil supplies might have an impact on WTI pricing. Export resumption could lead to increasing production volumes, which might result in the rise in supply of the global market. This in turn could lead to declining WTI prices.

The increase in oil exports in other part of the planet is also worth noting. In March, energy transit in Venezuela rose to the levels previously recorded in August of last year. The main growth factor was resuming supplies of Chevron.

PDVSA reopened two export agreements, including the deal with Portugal's Adinius Sociedade de Servicios and Hangzhou Energy. As a result, total crude oil shipments to China amounted to 774,400 barrels per day, which is higher than volumes in the past two months.

In addition, Chevron increased exports to the U.S. to 115,000 barrels of Venezuelan heavy oil per day compared to February volumes of about 80,000 barrels per day.

WTI crude oil prices hit their target at 80.90 amid OPEC+ agreement to cut oil production by 1.66 million barrels per day. This news created a gap of 567 points. In fact, the gap overlapped by 80%, so the downward correction might be expected in the near term. The price has tested and pushed away from the major resistance at 80.90.


Signal:

The short-term outlook for WTI suggests selling.

The target is at the level of 75.70.

Part of the profit should be fixed near the level of 78.10.

Stop-loss is set at the level of 82.40.

The bearish trend is of short-term nature, so it is worth to choose the volume of trade not more than 2% of your balance.


This content is for informational purposes only and is not intended to be investing advice.

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