Brent Crude Oil: the oil market is preparing for a new trend
Current trend
Benchmark Brent Crude Oil prices are correcting downwards, trading just above $100 a barrel.
The escalation of the military conflict on the territory of Ukraine, which has become the cause of unprecedented anti-Russian sanctions, causes investors to fear that there will be a shortage of supply on the market due to the refusal of some countries to import Russian energy resources. However, OPEC Secretary General Mohammed Barkindo acknowledged that the European Union has little to replace the oil it imports from Russia, and because of the sanctions, the world market may face the loss of about 7M barrels of Russian oil per day.
The pressure on the market comes from unprecedented measures to release reserve reserves of their oil in 120M barrels by countries participating in the International Energy Agency, such as the United States, Japan, and South Korea, to stabilize market prices. Also, to the release by the IEA countries of 120M barrels, 60M barrels will fall on the main member of the agency, the United States, which will supply an additional 120M barrels of its reserves to the market independently. Japan has already released 15M barrels, and South Korea is preparing to increase its supply by 7.23M barrels.
The market has another reason. It is no secret that the largest positions are formed on the stock exchange in double positions called "spread." There is a historical situation when the index of the ratio of the US dollar to a basket of world currencies, USD Index, and Brent Crude Oil cost the same. Quotes of both the dollar index and oil are around 100, which creates the possibility of working on expanding the difference in these prices in both directions at once. In other words, both positions are being formed on the rise in oil/fall in the dollar index and the fall in oil/rise in the dollar index. In any case, the amount of money in this position is already huge, which is evident from the volatility, and, therefore, this will lead to serious price fluctuations soon.
Support and resistance
On the global chart, the price continues to trade within the formation of the global Triangle pattern. Technical indicators reversed and gave a sell signal: the range of fluctuations of the Alligator EMA began to expand downwards, and the histogram of the AO oscillator moved into the sell zone.
Resistance levels: 103.44, 118.07.
Support levels: 96.20, 81.44.
Benchmark Brent Crude Oil prices are correcting downwards, trading just above $100 a barrel.
The escalation of the military conflict on the territory of Ukraine, which has become the cause of unprecedented anti-Russian sanctions, causes investors to fear that there will be a shortage of supply on the market due to the refusal of some countries to import Russian energy resources. However, OPEC Secretary General Mohammed Barkindo acknowledged that the European Union has little to replace the oil it imports from Russia, and because of the sanctions, the world market may face the loss of about 7M barrels of Russian oil per day.
The pressure on the market comes from unprecedented measures to release reserve reserves of their oil in 120M barrels by countries participating in the International Energy Agency, such as the United States, Japan, and South Korea, to stabilize market prices. Also, to the release by the IEA countries of 120M barrels, 60M barrels will fall on the main member of the agency, the United States, which will supply an additional 120M barrels of its reserves to the market independently. Japan has already released 15M barrels, and South Korea is preparing to increase its supply by 7.23M barrels.
The market has another reason. It is no secret that the largest positions are formed on the stock exchange in double positions called "spread." There is a historical situation when the index of the ratio of the US dollar to a basket of world currencies, USD Index, and Brent Crude Oil cost the same. Quotes of both the dollar index and oil are around 100, which creates the possibility of working on expanding the difference in these prices in both directions at once. In other words, both positions are being formed on the rise in oil/fall in the dollar index and the fall in oil/rise in the dollar index. In any case, the amount of money in this position is already huge, which is evident from the volatility, and, therefore, this will lead to serious price fluctuations soon.
Support and resistance
On the global chart, the price continues to trade within the formation of the global Triangle pattern. Technical indicators reversed and gave a sell signal: the range of fluctuations of the Alligator EMA began to expand downwards, and the histogram of the AO oscillator moved into the sell zone.
Resistance levels: 103.44, 118.07.
Support levels: 96.20, 81.44.