Current trend

Prices for WTI Crude Oil are testing the 77.70 mark for a breakdown. Investors focus on the oil supply and demand balance, as well as geopolitical factors.

Thus, earlier Russian Deputy Prime Minister Alexander Novak said that at the moment, as part of the deal with OPEC , an increase in production volumes was not being considered but the situation might change under the influence of external reasons. The situation in the Middle East remains tense but experts suggest that after the completion of Israel’s operation in Rafah, it may stabilize.

The dynamics of the US oil reserves supported the price. The American Petroleum Institute (API) report reflected a decrease of 1.43M barrels after an increase of 4.906M barrels earlier. Final statistics from the US Department of Energy’s Energy Information Administration (EIA) are due today at 16:30 (GMT 2): analysts expect a decrease of 1.430M barrels after a correction of 7.265M barrels for the previous period.

In addition, investors will pay attention to the Fed’s representatives' speeches, including Philip Jefferson, Susan Collins, and Lisa Cook but the officials’ comments are unlikely to significantly change market sentiment. Analytics do not expect interest rates to be cut until the fall, which will support the dollar against the expected adjustment of monetary policy by the European Central Bank (ECB) and the Bank of England.

The correction in the oil market continues. According to the latest report from the US Commodity Futures Trading Commission (CFTC), last week, net speculative positions in WTI Crude Oil increased slightly from 264.8K to 265.5K. As for the dynamics, the buyers began to gain positions again but so far this has little effect on the movement of the quotes. Thus, the balance of the “bulls” among producers amounted to 327.530K transactions versus 296.022K for the “bears.” Overall, buyers opened 11.528K new contracts last week, while sellers cut them by 11.360K.

Support and resistance

On the daily chart, Bollinger Bands are declining: the price range is expanding, letting the “bears” renew local lows. The MACD indicator is declining, maintaining a relatively strong sell signal: the histogram is below the signal line. Stochastic, having retreated from the lows, reversed into an upward plane, signaling in favor of the development of “bullish” dynamics soon.

Resistance levels: 79.07, 80.00, 81.00, 82.00.

Support levels: 78.00, 77.00, 76.00, 75.00.

Trading tips

Short positions may be opened after a breakdown t of 77.00, with the target at 75.00. Stop loss – 78.00. Implementation time: 1–2 days.

Long positions may be opened after a rebound from 77.00 and a breakout of 78.00, with the target at 80.00. Stop loss – 77.00.