Crude oil price tested the 82.00 barrier and found solid resistance there, to show sideways trades now, waiting to get positive motive that assist to push the price to resume the expected bullish trend on the intraday and short-term basis, which targets 84.90 areas mainly. The price is supported by the EMA50, which suggests the continuation of the bullish trend for the upcoming perio.
The rise in crude oil price is driven by several factors, such as:
- The tightness in the global oil supply, as OPEC+ maintains its cautious stance on increasing production amid the uncertainty of the COVID-19 pandemic.
- The recovery in the global oil demand, as vaccination campaigns and easing lockdowns boost economic activity and fuel consumption.
- The geopolitical tensions in the Middle East, especially the recent attack on a tanker off the coast of Oman that killed two crew members and raised fears of a new escalation in the region.
Brent oil price hovers around 85.55 level
Brent oil price, the global benchmark, hovers around 85.55 level since yesterday, getting continuous positive support by the EMA50, waiting to resume the expected bullish trend for the upcoming period, which targets 86.70 followed by 88.22 levels as next main stations. The price needs to breach 85.80 to ease the mission of achieving the expected rise, while breaking 84.33 will press on the price to turn to decline and head to achieve new bearish correction on the intraday and short term basis.
Brent oil price is also influenced by the same factors as crude oil price, as well as:
- The weakness of the US dollar, which makes oil cheaper for holders of other currencies.
- The expectations of a lower US crude inventory, which indicates a higher demand in the world’s largest oil consumer.
Oil prices hit one-week high after a sharp drop in US crude stocks
Oil prices rose in European trade on Wednesday on track for the second profit in a row, scaling a one-week high after a sharp drop in US crude stocks. The Energy Information Administration reported a steep drop of 10.6 million barrels in US crude inventories in the week ending August 25, beating forecasts of a 2.7 million-barrel decline. This was the largest weekly drawdown since January and reflected lower imports and higher refinery runs.
The drop in US crude stocks boosted the market sentiment and supported the oil prices, as it signaled a strong demand and a balanced market. However, some analysts warned that the impact of Hurricane Ida, which hit the US Gulf Coast on Sunday and disrupted oil production and refining operations, could weigh on the oil market in the coming weeks.
