Emmanuel OchayiIn a nail-biting trading session today, oil prices hung in the balance after surging to a new yearly high. The global oil market, already on edge from recent surprise announcements by Russia and Saudi Arabia, now eagerly awaits any remarks from Saudi Arabia’s Minister of Energy and Oil, Prince Abdulaziz bin Salman.
The minister’s comments could potentially exert a significant influence on the already volatile commodity markets.
Join our WhatsApp ChannelEarlier this month, Russia and Saudi Arabia sent shockwaves through the oil industry by revealing their intentions to extend production cuts until the year’s end. The spotlight now shifts to Saudi Arabia, leaving traders speculating on whether the kingdom will take further measures to stabilize the oil market.
READ ALSO: Global Investors Brace For Central Bank Showdown: Dollar Weakens, Gold Shines
Meanwhile, the US Dollar faces its own set of challenges, with a relatively uneventful calendar until Wednesday.
On that day, the US Federal Reserve is expected to announce its decision on interest rates, with market expectations leaning toward no change. The Greenback’s fate hinges on the subsequent speech by Fed Chair Jerome Powell, set to follow the rate decision.
As of the latest update, WTI crude oil is trading at $90.828 per barrel, while Brent Oil commands a price of $94.00.
Key Developments in the Oil Market:
- Russia Conducts Surprise Drills to Safeguard North Sea Route.
- Sanctioned Iranian Oil Funds Reportedly Shifted to Qatar.
- Saudi Arabia Records a 0.792 Million Barrel per Day Drop in Crude Exports for July.
- US Diesel Producers Face Supply Shortages, Potentially Benefitting Russian Oil.
- Saudi Energy Minister Prince Abdulaziz bin Salman Set to Address Industry Conference Today.
- Hedge Funds Raise Price Forecasts for Brent and Crude to 15-Month Highs.
- Rising Diesel and Gasoline Prices Spark Concerns of Renewed Energy Inflation in the US and Europe.
- Growing Supply Deficit Raises Concerns, Especially If Demand Surges in China, Supported by Recent Macroeconomic Data.
- Kazakhstan Increases Daily Oil and Gas Condensate Production by 10%.
Oil Technical Analysis: A Delicate Balance
The current state of oil prices finds them delicately poised, with any supply disruption capable of triggering a further surge in oil futures.
While the Relative Strength Index (RSI) suggests overbought conditions, the potential for drawdowns in US stockpiles keeps the possibility of additional gains alive. However, a rapid ascent to $93.12 is not anticipated without a substantial catalyst.
On the upside, the critical level to surpass is the double top from November of the previous year at $93.12. Even though this level appears within reach, market sentiment has already factored in numerous supply deficit scenarios and bullish outlooks. Should $93.12 be breached, the next target lies at $97.11, marking the high from August 2022.
Conversely, the pivotal support level stands at $84.30, dating back to August 10. Failure to hold this level could trigger a significant downturn, potentially sending oil prices plummeting to a key support floor of around $78.00.
In the days ahead, the oil market will remain on tenterhooks, with a blend of geopolitical factors, supply-demand dynamics, and central bank decisions poised to dictate the direction of oil prices.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
Follow Us