Brent crude futures is maintaining stability this Friday, with traders awaiting an OPEC+ meeting that might lead to further supply cuts. Brent crude was down 8 cents at $81.34 a barrel, following a 0.7% drop in the previous session.
How Will China’s Regulation Affect Oil?
2023-08-30 • Updated
China has issued new oil product export quotas to allow oil companies to send surplus barrels overseas, particularly Sinopec, which has the highest volume among quota holders. While the exact quota volume remains undisclosed, oil companies are forecasted to export approximately 3.5 million metric tons of clean oil products in September, a 10% increase from August. This move is seen as a strategy to support industrial activities, boost the country's economy, and sustain crude oil imports. The government controls China's clean oil product exports through quota allocations, focusing on meeting domestic demands. China exported 23.99 million metric tons of gasoline, jet fuel, and gasoil in the first seven months of the year, up 76.1% compared to the same period in 2022.
US Dollar - D1 Timeframe
The US Dollar has been prepping for a bearish move for a couple of weeks now, and it seems fully ready to make the move. The resistance trendline, 200-day moving average, and the rally-base-drop supply appear to cause the bearish momentum. In this case, I expect that the bears remain in charge for at least a short while since the price may create a new, lower low.
XBRUSD - D1 Timeframe
XBRUSD, as seen in the chart above, has made an initial reaction from the trendline support. However, the price may slip lower toward the 200-day Moving average to find a much stronger confluence based on the demand zone, 88% Fibonacci retracement level, and the moving average support.
XTIUSD - D1 Timeframe
Like XBRUSD, as we saw earlier, the price action on XTIUSD has also made its initial pull away from the trendline support. However, I find it hard to rely on this move because the current market reaction doesn't take place from an actively interesting confluence area. In that sense, I hope to see the price slink into the highlighted demand zone close to the 200-day moving average for my entry consideration.
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Thanks to the incredible advancements in horizontal drilling and fracking technology, the United States has experienced a mind-blowing shale revolution. They've become the heavyweight champion of crude oil production, leaving Saudi Arabia and Russia in the dust. They even turned the tables and became net exporters of refined petroleum products in 2011.
Oil prices rebounded slightly on Friday but are still expected to show losses for the week due to concerns about slowing growth in the US and China. US crude futures rose 2.7% to $70.41 per barrel, while the Brent contract increased by 2.5% to $74.33 per barrel.
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