WTI falls back towards $110

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  • WTI has fallen back towards $110, with oil prices weighed down by declining macro risk sentiment.
  • However, declines may be attractive to potential buyers as the lockdown in Shanghai eases and Russian/OPEC production suffers.
  • Oil prices fell in late trading despite a larger-than-expected decline according to weekly data from the US EIA.

On Wednesday, constructive updates on the easing of restrictions in Shanghai failed to sustain oil markets, with prices coming under pressure along with global equities as investors pondered the prospect of a quick tightening by banks. in a context of slowing global growth. WTI futures of the first month they nearly made new highs for the week mid-session at $155.50, but have since pulled back to just above $110, down about $2.50 on the day. Prices fell in late trading despite weekly US crude inventories falling more than expected, according to data released by the Energy Information Agency (EIA).

Turning to oil-related developments, China allowed hundreds of financial institutions in Shanghai to resume work and eased some testing requirements for American and non-US travelers, raising hopes that oil demand locked in the world’s second largest economy and second largest consumer of oil could recover soon. Meanwhile, although the EU Commission on Wednesday announced a €300 billion investment plan up to 2030 to wean the bloc from all Russian fossil fuel imports, the bloc has yet to convince Hungary to sign its ban proposal. of Russian oil imports in the coming months.

According to some, the impossibility of reaching an agreement on the long-awaited Russian oil embargo is beginning to influence prices, or at least prevent them from breaking above the late-March high of $116.50. On the other hand, and perhaps also contributing to the recent profit taking that has pushed WTI back towards $110, it has been reported that the US is planning an easing of some of the sanctions on Venezuela. Apparently, the US could even allow oil giant Chevron to negotiate oil licenses with Venezuela’s national oil producer PDVSA.

The drop in global equities could push WTI back below $110, but traders should remember that WTI has been consistently supported by bearish buying in recent weeks. As long as China continues to move towards a more open economy, the EU moves towards a ban on Russian oil, Russian production continues to decline, and the rest of OPEC+ continues to struggle to raise production (as revealed by a survey on Tuesday, which remained the case in April), the fall towards $100.50 will remain attractive.

Technical levels

WTI US OIL

Panorama
Last Price Today 110.74
Today’s Daily Change 0.04
Today’s Daily Change % 0.04
Today’s Daily Opening 110.7
Trends
20 Daily SMA 104.37
50 Daily SMA 103.95
100 Daily SMA 95.97
200 Daily SMA 84.95
levels
Previous Daily High 113.18
Previous Daily Minimum 108.96
Previous Maximum Weekly 109.55
Previous Weekly Minimum 97.21
Monthly Prior Maximum 109.13
Previous Monthly Minimum 92.65
Daily Fibonacci 38.2% 110.57
Daily Fibonacci 61.8% 111.57
Daily Pivot Point S1 108.72
Daily Pivot Point S2 106.73
Daily Pivot Point S3 104.5
Daily Pivot Point R1 112.93
Daily Pivot Point R2 115.16
Daily Pivot Point R3 117.15

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Source: Fx Street

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