The oil price looks optimistic. What are the reasons?
Oil market updates on October 23
Crude oil inventories – 17:30 MT (14:30 GMT)
According to yesterday’s news OPEC is considering further production cuts. The next meeting of oil-producing countries is scheduled for December 5-6. The announcement pushed the oil prices up. The move to the downside came after the release of private oil data. According to it, the number of barrels advanced by 4.45 million (vs. the 2.75 million expected). Today, we will be awaiting the publication of crude oil inventories by the EIA at 17:30 MT. According to forecasts, the number of barrels is expected to increase by 2.5 million. In case of lower figures, the oil prices will go up.
- WTI has tested the $54.60 resistance level but slid down towards the support at $54. If the number of barrels is lower than the forecasts, this level will be broken. The next support will be placed at $53.4 (100-period SMA). After that, the further support level will lie at $52.8. In case of a higher-than-expected number of barrels, the pair will break the $54.6 level. The next resistance will lie at $54.93.
- The price of Brent followed a similar scenario. It has tested the $60.25 resistance level but fallen to the support at $59.33 (50-period SMA). At the moment, the further key levels from the downside lie at $58.9 (100-period SMA) and $58.57. From the upside, the first resistance is placed at $59.65. After that, you need to pay attention to the $59.97 level. If they are broken, the retest of the $60.25 level will be possible.
Notice, that you need to choose BRN- and WTI- futures to trade oil in Metatrader 4.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.
The US dollar’s weakness offered a boost to emerging-market currencies and oil.