WTI starting to recover from inflation driven plunge
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Oil prices surged above $83 per barrel in volatile trading on Thursday, recovering from significant drops caused by concerns about rising US inflation, as OPEC reduced its 2021 oil demand prediction owing to high energy prices.
In a monthly report, the Organization of Petroleum Exporting Countries (OPEC) stated that it expected oil consumption to average 99.49 million barrels per day (bpd) in the fourth quarter of 2021, a 330,000 bpd decrease from last month's prediction.
Possible Scenario for the market :
The market is currently trading at $81.26 and looks like it going to the support line located at $80.17 where a battle will happen between the Bears and the Bulls over control, the outcome will probably be in favor of the bulls which will cause the market to increase in value reaching the first resistance at $84.08.
in case the demand for oil increases even more then we will most likely see a further push that could reach the $88.00 level by the end of the week.
Technical Analysis show :
1) The market is below the 5 10 20 MA and EMA indicating a Bearish Short-term movement, but still above the 50 100 and 200 MA and EMA indicating a Bullish Long-term trend
2) The RSI is at 51.61 showing good strength in the market with a small Bullish divergence that could be a sign of a Bearish short-term trend.
3) The MACD is above the 0 line still indicating a Bullish market, but it has a Negative crossover between the MACD line and the Signal line indicating a small Bearish movement.
Support & Resistance points :
support Resistance
1) 80.17 1) 84.08
2) 78.63 2) 86.45
3) 76.26 3) 87.99
Fundamental point of view :
OPEC expects global consumption to hit 100 million bpd in the third quarter of 2022, three months later than predicted last month.
On Wednesday, data indicated that inflation in the United States surged by 6.2 percent, the quickest rate in 30 years, owing primarily to increasing energy prices, which pushed the dollar higher while sending Brent and WTI oil down by 2.5 % and 3.3 %, respectively.
A surge in US oil supplies following the government's release of some critical reserves pushed up prices even further.
In reaction to rising inflation, US President Joe Biden stated he directed the National Economic Council to concentrate on lowering energy costs and the Federal Trade Commission to crack down on market manipulation in the energy industry in order to reverse inflation.
This is my personal opinion done with technical analysis of the market price and research online from Fundamental Analysts and News for The Fundamental point of view, not financial advice.
If you have any questions please ask and have a great day !!
Thank you for reading.
_________________________________Make sure to Like and Follow if you like the idea_________________________________
Oil prices surged above $83 per barrel in volatile trading on Thursday, recovering from significant drops caused by concerns about rising US inflation, as OPEC reduced its 2021 oil demand prediction owing to high energy prices.
In a monthly report, the Organization of Petroleum Exporting Countries (OPEC) stated that it expected oil consumption to average 99.49 million barrels per day (bpd) in the fourth quarter of 2021, a 330,000 bpd decrease from last month's prediction.
Possible Scenario for the market :
The market is currently trading at $81.26 and looks like it going to the support line located at $80.17 where a battle will happen between the Bears and the Bulls over control, the outcome will probably be in favor of the bulls which will cause the market to increase in value reaching the first resistance at $84.08.
in case the demand for oil increases even more then we will most likely see a further push that could reach the $88.00 level by the end of the week.
Technical Analysis show :
1) The market is below the 5 10 20 MA and EMA indicating a Bearish Short-term movement, but still above the 50 100 and 200 MA and EMA indicating a Bullish Long-term trend
2) The RSI is at 51.61 showing good strength in the market with a small Bullish divergence that could be a sign of a Bearish short-term trend.
3) The MACD is above the 0 line still indicating a Bullish market, but it has a Negative crossover between the MACD line and the Signal line indicating a small Bearish movement.
Support & Resistance points :
support Resistance
1) 80.17 1) 84.08
2) 78.63 2) 86.45
3) 76.26 3) 87.99
Fundamental point of view :
OPEC expects global consumption to hit 100 million bpd in the third quarter of 2022, three months later than predicted last month.
On Wednesday, data indicated that inflation in the United States surged by 6.2 percent, the quickest rate in 30 years, owing primarily to increasing energy prices, which pushed the dollar higher while sending Brent and WTI oil down by 2.5 % and 3.3 %, respectively.
A surge in US oil supplies following the government's release of some critical reserves pushed up prices even further.
In reaction to rising inflation, US President Joe Biden stated he directed the National Economic Council to concentrate on lowering energy costs and the Federal Trade Commission to crack down on market manipulation in the energy industry in order to reverse inflation.
This is my personal opinion done with technical analysis of the market price and research online from Fundamental Analysts and News for The Fundamental point of view, not financial advice.
If you have any questions please ask and have a great day !!
Thank you for reading.