Oil might continue to rise when China is easing restrictions

Oil might continue to rise when China is easing restrictions

19 May 2022 from CarlsquareReading time: 2 minutes

Since its peak in March, oil-prices have been consolidating at roughly USD $110 a barrel as Europe is working on a Russian embargo. The sanctions against Russia amidst the invasion on Ukraine have caused supply disruptions to oil where we find that European countries, as well as the US are diverting to alternative sources for oil. For instance, Russian oil-dependent Germany plans to stop importing Russian oil by the end of the year.

As supply disruptions have been offset by national lockdowns and less cross-border tourism, lifting of restrictions could further trigger the demand for oil. In fact, several provinces in China are gradually loosen up on restrictions with Shanghai and Jiangsu leading the way.

Since 11th of April, price of Brent Crude oil has been consolidating, finding a support level at USD $98 and a resistance-level at USD $114. Further national announcements of easing restrictions might act as catalyst for Brent Crude oil and break the resistance.

Brent Crude Future, Current Rolling (in USD) 12-month chart

Source: Infront and Carlsquare. Note: Past performance is not a reliable indicator of future results.

Brent Crude Future, Current Rolling (in USD) weekly five-year chart

Source: Infront and Carlsquare. Note: Past performance is not a reliable indicator of future results.

The full name for abbreviations used in the previous text:

EMA 9: 9-day exponential moving average

Fibonacci: There are several Fibonacci lines used in technical analysis. Fibonacci numbers are a sequence of numbers in which each successive number is the sum of the two previous numbers.

MA20: 20-day moving average

MA50: 50-day moving average

MA100: 100-day moving average

MA200: 200-day moving average

MACD: Moving average convergence divergence

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28/06/2022 19:54:20

 

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