OPEC and their allies almost reached their targets of limiting oil production, but have significantly increased their cost of raw materials and have prompted US Drills to drastically increase seismic extraction. At first glance typical market behavior by companies, but if US mining does not rise, they will be retained in history.
Oil inventories in the most oil-consuming countries have fallen to 6-year levels, as limited supply from OPEC+ and high world consumption forecasts have prompted investors to increase purchases.
The main problem with oil growth remains the US oil shale, which helped the country outrun Saudi Arabia in extraction.
Technical view of WTI
Despite the decline in recent weeks, the price has kept the main diagonal, reaching key levels of support where we can look for a twist. The price is in a support zone formed by horizontal support, a major diagonal and 38.2% Fibonacci correction. Taking into account the foundation and lack of cost Action, long positions of the current levels will be too risky. Dem (8) is in the over-sales area, but it still does not indicate Long. However, if you take longer than current levels, SL will be below $ 57.00 a barrel.
If the price moves below the support zone, negative moods will increase and the likelihood of a further decline will increase significantly.
Source: Bloomberg Pro Terminal
Young trader Petar Milanov
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