Breaking: oil price action after major developments
13 December 2022
Price of oil turned bullish in the last 2 sessions as traders rushed to buy the dip while the key pipeline of Keystone still shut after the oil spill in recent days without a timeline of when it will operate again. The backlog in oil tankers in Turkey started easing and European ban on Russian oil already priced in, also further boosting the price of “black gold”.
‘Covid restrictions are easing in China - the second top producer of crude oil- increasing sentiment of increased demand in the following days’ said Antreas Themistokleous, market analyst in Exness. ’The SPR (Strategic Petroleum Reserve in United States is down by almost 36% compared to last year and estimates are if it keeps at this pace there will be limited to all time low by end of the month in an effort by the government to keep the price of oil down’
On the technical point of view the price is trading in an overall downtrend while the price corrected to the upside in the last sessions after the buyers rushed to buy the dip where the price hit the year’s low and is currently trading around the $74 price area.
If this correction continues to rally up then we could expect the first point of resistance around $76 just above the 23.6% of the Fibonacci and if sentiment about increased demand by China become a reality then we might see the price reaching the second level of resistance around $79 which consists of the 38.2% of the daily Fibonacci retracement level and also a level of reaction since late September.
In the event that the price resumes its bearish movement then we might expect the first point of support being around the $70 price area which is the psychological support of the round number and also the support area of the lower band of Bollinger bands.
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