Rising Crude Oil Prices as Aramco Pushes OPEC+ for Stronger Cuts
Crude oil embarks on a winning streak as Aramco’s earnings signal the need for OPEC+ to intensify its efforts
FUNDAMENTAL OVERVIEW:
- Crude oil is approaching $72.00 after rising over 3% on Monday.
- Tropical Storm Rafael is expected to impact a production-sensitive area in the coming days, potentially cutting U.S. output by approximately 1.7 million barrels daily.
- Meanwhile, the U.S. Dollar Index remains stable to slightly fluctuating as the country prepares for election day to select its next president.
Crude oil prices rose again on Tuesday for the second consecutive day, fueled by OPEC+’s postponed oil production normalization. There are also concerns about reduced supply due to potential disruptions in the U.S. Gulf region as Tropical Storm Rafael approaches oil rigs, which could lead to a loss of 1.7 million barrels per day in production. Additionally, Saudi Aramco, the largest state-owned oil producer in Saudi Arabia, reported a 15% decline in quarterly profits, increasing the likelihood that Saudi Arabia will push OPEC+ to take further action to limit supply.
The U.S. Dollar Index (DXY), which measures the Greenback’s performance against six other currencies, moves sideways as Americans head to the polls to elect their next president. The likelihood that markets will have clarity on whether Vice President Kamala Harris or former President Donald Trump will emerge as the winner by Wednesday is quite low. More than 100 court cases and litigation efforts could arise if no clear winner is declared, a situation that could plunge the U.S. into weeks or even months of political uncertainty.
At the time of writing, Crude Oil (WTI) trades at $71.50.
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CRUDE OIL TECHNICAL ANALYSIS DAILY CHART:
Technical Overview:
Crude Oil is currently trading within a up channel.
Crude Oil is positioned above all the Moving Averages (SMA).
The Relative Strength Index (RSI) is in the Buying zone, while the Stochastic oscillator suggests a Positive trend.
Immediate Resistance level: 72.10
Immediate support level: 69.80
HOW TO TRADE CRUDE OIL
Crude oil prices initially declined but found support and rebounded. After consolidation, the price broke through a key resistance level and surged higher. However, the upward momentum stalled as the price encountered resistance. A subsequent decline brought the price back to a previous support level, from where it has again started to rise. Currently, the price is trading near a crucial resistance level. A break above this level could signal further upward movement.
TRADE SUGGESTION- STOP BUY – 72.40, TAKE PROFIT AT- 74.82, SL AT- 71.08.
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