| Scenario | |
|---|---|
| Timeframe | Weekly |
| Recommendation | SELL STOP |
| Entry Point | 78.50 |
| Take Profit | 74.50 |
| Stop Loss | 81.00 |
| Key Levels | 74.50, 78.50, 81.60, 86.20 |
| Alternative scenario | |
|---|---|
| Recommendation | BUY STOP |
| Entry Point | 81.60 |
| Take Profit | 86.20 |
| Stop Loss | 80.00 |
| Key Levels | 74.50, 78.50, 81.60, 86.20 |
Current trend
The price of North American WTI Crude Oil is correcting within a downtrend at 79.84.
China in July reduced oil purchases from Russia by 23.2% to 8.07M tons, resulting in an average daily volume of 260.0K tons or 1.9M barrels per day compared to 2.56M barrels per day earlier, while supplies from Saudi Arabia decreased by 28.4% to 5.65M tons, which led to an overall reduction in China’s oil imports by 16.1% to 43.69M tons. However, purchases of Iranian oil increased to 1.5M barrels per day as it trades at a deep discount due to sanctions.
The American Petroleum Institute (API) statistics may show a 1.200M barrel decline in oil inventories this week after falling 6.195M barrels earlier, while the US Department of Energy’s Energy Information Administration (EIA) figures may change by –2.299M barrels compared to –5.960M barrels earlier. Also, experts expect a decrease in oil reserves in Cushing’s storage facilities by 0.906M barrels against –0.873M barrels in the previous period.
Support and resistance
On the daily chart, the trading instrument is correcting downwards, forming a Head and shoulders reversal pattern with the Neckline at 78.50.
Technical indicators keep a buy signal, not excluding a downward movement: fast EMAs on the Alligator indicator began to narrow the range of fluctuations, and the AO histogram forms downward bars, falling in the buying zone.
Resistance levels: 81.60, 86.20.
Support levels: 78.50, 74.50.
Trading tips
Short positions may be opened after the price drops and consolidates below 78.50 with the target at 74.50. Stop loss — 81.00. Implementation period: 7 days or more.
Long positions may be opened after the price rises and consolidates above 81.60 with the target at 86.20. Stop loss — 80.00.
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