Today, the Brent crude oil price has experienced a turbulent opening upwards, turning around from $86.72 to reach its current price at $87.54. The truth is that the triple bounce in the middle zone of the channel represents that the oil price has come to stay at least in this price area, after the high correction it has suffered since Friday April 12 and 19 where it could not pierce its upward price zone. It seems that in spite of everything West Texas is following in the same wake. Partly it is due to the results of oil and gas extractive companies that have had poor quarterly results, partly it is also due to crude inventories being slightly lower as the gasoline report was at 600,000 barrels versus 778,000 barrels for the five year average.
Last week, refineries increased their inventory by 1.6 million barrels, 7% below the five-year average for this time of year. This is a clear sign that the United States has become a more reliable supplier of this commodity to Europe, especially since Europe no longer relies on Russia for its orders. There are clear doubts in the market that Biden and his restriction policies, especially on liquid gas, could leave them in a precarious state. In other words, the lack of diversification in an environment of geopolitical risk may be the determining factors that especially affect the Brent barrel and LNG with a view to the coming winters. This downward adjustment may create problems in Europe. While demand remains on pause, the region currently in spring has flagged at the Amsterdam conferences its concerns among the main players in this sector, especially if we have a cold winter on this side of the Atlantic, which may generate that the futures of such commodities are reflected upwards, since contracts for next winter may be more expensive than today, ahead of time.
All this comes in the wake of the conflicts in the Strait of Hormuz, the new Russian northern lane for Chinese cargo transports, and the new Venezuelan-US enmity that seems to be an addition to all the ills orchestrated by President Biden in that part of South America.
Merey crude oil was sold in China for $14 a barrel, at ICE Brent on purpose compared to $11 a barrel prior to the establishment of sanctions between the USA and Venezuela, and at $8 a barrel at the beginning of the year. In other words, China continues to buy more from Venezuela than Europe did through Washington, and in the end the Mexican and Russian reports are also presenting themselves as an additional reason to be bullish on these products.
If we go back to the chart, both Brent and Crude are showing a clear upward trend, its trading bell is marking a possible return to $89.34 dollars although on the other hand its RSI started in oversold 38.22% is currently in the middle zone at 44.73, so it has a long stretch to fulfill the forecast of being bullish again. What is clear is that the candlestick pattern shows a clear upward trend.
Ion Jauregui - ActivTrades Analyst
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
Last week, refineries increased their inventory by 1.6 million barrels, 7% below the five-year average for this time of year. This is a clear sign that the United States has become a more reliable supplier of this commodity to Europe, especially since Europe no longer relies on Russia for its orders. There are clear doubts in the market that Biden and his restriction policies, especially on liquid gas, could leave them in a precarious state. In other words, the lack of diversification in an environment of geopolitical risk may be the determining factors that especially affect the Brent barrel and LNG with a view to the coming winters. This downward adjustment may create problems in Europe. While demand remains on pause, the region currently in spring has flagged at the Amsterdam conferences its concerns among the main players in this sector, especially if we have a cold winter on this side of the Atlantic, which may generate that the futures of such commodities are reflected upwards, since contracts for next winter may be more expensive than today, ahead of time.
All this comes in the wake of the conflicts in the Strait of Hormuz, the new Russian northern lane for Chinese cargo transports, and the new Venezuelan-US enmity that seems to be an addition to all the ills orchestrated by President Biden in that part of South America.
Merey crude oil was sold in China for $14 a barrel, at ICE Brent on purpose compared to $11 a barrel prior to the establishment of sanctions between the USA and Venezuela, and at $8 a barrel at the beginning of the year. In other words, China continues to buy more from Venezuela than Europe did through Washington, and in the end the Mexican and Russian reports are also presenting themselves as an additional reason to be bullish on these products.
If we go back to the chart, both Brent and Crude are showing a clear upward trend, its trading bell is marking a possible return to $89.34 dollars although on the other hand its RSI started in oversold 38.22% is currently in the middle zone at 44.73, so it has a long stretch to fulfill the forecast of being bullish again. What is clear is that the candlestick pattern shows a clear upward trend.
Ion Jauregui - ActivTrades Analyst
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.