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WTI remains in control, above a key support

  • Oil loses ground as the market values ​​weak demand from China.
  • Russian threats to stop oil exports lend some support.

West Texas Intermediate Crude is under pressure midweek, shedding about 5% in New York midday trade and taking out key support territory as the greenback rises to a 20-year high as the market prices in weak demand from China.

Headlines are dominated by Covid-19 lockdowns in China, the world’s top net importer, and concerns about movement restrictions already affecting 46 cities. As many as 65 million people across the country are now subject to mobility restrictions and the dent in demand is expected to spread quickly across international markets, which are already grappling with fears that the global economy is headed for a recession. .

The rise in infectious strains of the virus raises fears that authorities may be forced to lockdown areas more frequently as China persists in its “contagion-zero” strategy,” analysts at ANZ bank said.

However, Russian threats to halt oil exports should the G-7 and EU plan to cap Russian oil prices go ahead provided some support for oil. However, the decision made this week by OPEC+ to reduce production quotas by 100,000 barrels per day has also been taken into account.

Analysts at TD Securities note that this indicates that this group of swing producers will be increasingly active in their decision-making, as they eye the downturn barrel. ”In turn, energy supply risks should also be reinforced by the reactivation of OPEC+. The tail to the right in energy markets is getting fatter,” the analysts argued.

Meanwhile, the Energy Information Administration (EIA) slightly raised its global oil demand forecast for 2022 on Wednesday, while also cutting its production estimate for this year.

Technical levels

WTI US OIL

Panorama
Last Price Today 81.68
Today’s Daily Change -5.03
Today’s Daily Change % -5.80
Today’s Daily Opening 86.71
Trends
20 Daily SMA 90.36
50 Daily SMA 94.25
100 Daily SMA 101.77
200 Daily SMA 95.49
levels
Previous Daily High 89.25
Previous Daily Minimum 85.99
Previous Maximum Weekly 97.28
Previous Weekly Minimum 85.77
Monthly Prior Maximum 97.68
Previous Monthly Minimum 85.39
Daily Fibonacci 38.2% 87.23
Daily Fibonacci 61.8% 88
Daily Pivot Point S1 85.38
Daily Pivot Point S2 84.06
Daily Pivot Point S3 82.12
Daily Pivot Point R1 88.64
Daily Pivot Point R2 90.57
Daily Pivot Point R3 91.9

Source: Fx Street

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