Current trend

The price of North American light crude oil WTI Crude Oil is correcting in a downward trend at 68.97 due to a decrease in geopolitical tensions in the Middle East and OPEC’s position on the market.

So, recently there have been signs of a weakening of the military conflict between Israel and Palestine, which in the long term will reduce the risks of blocking oil fields. Israeli Prime Minister Benjamin Netanyahu said that his country would only agree to a permanent ceasefire in the Gaza Strip and a guarantee that the border zone between the south of the region and Egypt would never be used by members of the Palestinian Hamas movement. This rhetoric, against the efforts of American mediators, who are preparing to present a new settlement plan next week, could ultimately lead to a peace agreement this year.

On the other hand, a significant drop in prices is being hampered by information from Reuters sources, according to which the OPEC group of producers has begun discussing the possibility of changing the dates of the planned increase in hydrocarbon production in October. Note that in addition to the official quotas of the alliance, there are voluntary additional reductions of eight OPEC countries by 1.65M barrels per day to the plans announced in April 2023, which will last until the end of 2025.

In turn, the report of the American Petroleum Institute (API), presented yesterday, reflected an adjustment in hydrocarbon reserves by –7.400M barrels compared to –3.400M barrels a week earlier. Today at 17:00 (GMT 2), similar data from the Energy Information Administration of the US Department of Energy (EIA) is due. Analysts expect a correction of –0.600M barrels.

Support and resistance

On the daily chart, the trading instrument is declining within a wave inside the downward channel of 74.00–66.00.

Technical indicators reinforce the sell signal. Fast EMAs on the Alligator indicator are below the signal line, expanding the range of fluctuations, and the AO histogram is forming correction bars, falling in the sell zone.

Resistance levels: 69.70, 73.70.

Support levels: 67.90, 64.00.

Trading tips

Short positions may be opened after the price declines and consolidates below 67.90, with the target at 64.00. Stop loss — 70.00. Implementation period: 7 days or more.

Long positions may be opened after the price grows and consolidates above 69.70, with the target at 73.70. Stop loss — 68.00.