Oil attempting to grow on lifting restrictions

Oil attempting to grow on lifting restrictions

Jun 22 • Hot Trading News, Top News • 204 Views • Comments Off on Oil attempting to grow on lifting restrictions

The price of oil (August Brent futures) on Tuesday, June 22, during the Asin session, increased above $ 74 per barrel of Brent. Participants in the black gold market are trying to stabilize oil prices amid hopes for an increase in demand for hydrocarbons in the summer due to the gradual lifting of covid restrictions on the movement of the population of various countries.

Meanwhile, analysts expect the price of Brent crude at $ 75 per barrel in 2022. At the same time, experts do not exclude its jump up to $ 100. This can happen against the backdrop of increased mobility after mass vaccinations. In addition, people may still prefer a private car, due to which the level of fuel consumption will increase in the future.

This year, the experts expect the price of oil at $ 68. The average oil price in 2021 is $ 64 per barrel, which is approximately equal to the 20-year average. Among the risks of price fall, we note the possible entry of Iranian oil into the market, deterioration in the discipline of the OPEC + deal, the mutation of the coronavirus and a slowdown in vaccination rates, tightening of monetary policy and an unstable position of the democratic majority in the US Congress.

The first place in oil supplies to China in May, as in April, was taken by Saudi Arabia. The indicator increased every month by 11.2% to 7.2 million tons. Iraq increased supplies to 4.49 million tons from 4.45 million in April, Oman increased oil exports to China by 17.5%, to 4.15 million tons. Angola increased shipments by 4% to 3.27 million. Brazil reduced the figure by 2% to 2.74 million tons. The UAE supplied 2.43 million tons (an increase of 31%), the USA – 1.07 million tons (an increase of 15%) and Malaysia – 1.04 million tons (an increase of 1.3 times). Shipments from Iran remain at zero for the fifth month in a row.

Norway in May reduced hydrocarbon production by 135k barrels (6.8%) by April to 1.86 million barrels per day, the Norwegian Petroleum Directorate (NPD) estimated. This turned out to be 2.9% above the NPD forecast. Including the volume of oil production in Norway in May amounted to 1.654 million barrels per day (4% higher than the NPD forecast and 3.6% lower than the April level). The broad fraction of light hydrocarbons (NGL) production amounted to 195 thousand barrels per day and condensate – 11 thousand. The volume of gas produced in Norway in May was 280.1 million cubic meters per day, which is 2.3% higher than the NPD forecast.

Technical outlook

Technically, the price is testing the previous swing high at $74.20. If the price manages to breach the previous level, it may target $75 ahead of $78 and $80.

The price is well above the 20-SMA on the 4-hour chart and remains supported by it in the near term. Further support on the downside lies at $72 ahead of $70.

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