Since the opening of today's trading day, Brent oil quotes have been rising again, touching the mark of $120.00 per barrel at the beginning. Based on the complex fundamental background, we expect further price growth. From a technical point of view, a breakdown of the local resistance level of 120.00 (today's maximum) may become a signal to enter long positions (or increase them).
Traders can also use a pullback to short-term support levels 115.00 110.10 to increase long positions, although aggressive buyers will probably find it possible to enter the market at current prices. Fears about the impact of new sanctions on Russian oil supplies and the absence of a nuclear deal with Iran continue to drive demand. Other (besides Iran and Russia) major oil producers, Saudi Arabia and the United Arab Emirates, cannot increase production quickly.
The next OPEC meeting will be held next week. In March, OPEC decided to increase oil production in April 2022 by 400 thousand barrels per day, to 41.694 million barrels per day. The oil coalition believes that the oil market is currently well balanced, and the current volatility is caused by geopolitical events.
The OPEC+ countries will likely remain committed to this plan, which is unlikely to hurt oil prices. The OPEC+ should remove production restrictions while maintaining the same rate of increase in production in September 2022.
Of the economic news for today, which will cause volatility in the financial market, investors will pay attention to the publication (at 12:30 GMT) of data on orders for durable goods and capital goods (excluding defense and aviation) in the United States (capital goods - durable goods used to produce durable goods and services) involving significant investments.
February forecast: -0.5% (durable goods orders), +0.5% (capital goods orders excluding defense and aviation), worse than previous values (+1.6% and +0.9%, respectively). This is negative for the dollar. Only the data better than the previous values will have a positive impact on the dollar.
- Support levels: 115.00, 110.10, 103.26, 100.00, 95.70, 87.70, 85.75, 83.50, 77.30, 65.50
- Resistance levels: 120.00, 130.00, 131.00
