Current trend

The price of WTI Crude Oil has resumed its upward trend near two-month highs and is holding at 73.70 during the Asian session. On Friday, the administration of US President Joe Biden announced the purchase of another 6.0M barrels of oil for the strategic reserve, which, in turn, acted as a driver of quotes strengthening by 2.5% to 73.62.

Additional support for the instrument is provided by reports of a reduction in oil export from Russia by 0.5M barrels per day and a voluntary reduction in production by Saudi Arabia by 1.0M barrels per day throughout July. However, poor June PPI data in China prevented a faster upside move, with companies adjusting prices by –5.4% due to reduced global and domestic demand. It is the ninth drop in a row, which indicates that there are significant problems in the recovery of the second world economy and increases the risks against fuel demand. In turn, on Friday, representatives of the Norwegian company Equinor reported that due to a lack of personnel, they were forced to suspend work at three fields (Gudrun, South Oseberg, and East Oseberg), the daily production of which is about 89.0K barrels of oil equivalent, and on Sunday, the production was stopped at the Sleipnir, Gullfaks A, and Gullfaks.

At the moment, the trading instrument is moving within the sideways range of 74.50–67.15, approaching its upper border. In case of a breakdown of 74.50, the quotes will continue their upward movement with the target at the resistance level of 80.94.

The medium-term trend reversed upwards, and buyers are trying to consolidate above the key trend resistance 73.17–72.59, after which zone 2 (78.97–78.39) will become the new buying target. Otherwise, it is worth opening short positions with the target at the June low of 66.85.

Support and resistance

Resistance levels: 74.50, 80.94, 83.40.

Support levels: 67.15, 62.00.

Trading tips

Short positions may be opened from 74.50 with the target at 67.15 and stop loss around 77.00. Implementation period: 9–12 days.

Long positions may be opened above 77.00 with the target at 80.95 and stop loss around 75.50.