Home Sports The price of oil clears the opening range in May

The price of oil clears the opening range in May


Talks about the price of oil

The oil price organizes a four-day rally, extending a series of high highs and lows from last week, and oil could continue to track declines from an annual high ($ 130.50) as it clears the opening range for May.

Oil price forecast: The price of crude oil clears the opening range for May

The oil price rises to a new monthly high ($ 114.69), even if Organization of the Petroleum Exporting Countries (OPEC) warn of a slowdown in global demand, and signs of limited supply could keep oil prices afloat throughout the year as the group plans to “adjust monthly total production by 0.432 MB / day in June 2022».

It appears that OPEC will maintain its current production schedule in the coming months, as the Monthly Oil Market Report (MOMR) now states that “in 2022, oil demand growth has been revised down by 0.3 mb / day to an average of 3 , 4 mb / day y / y, given the potential decline in world GDP and the revival of the COVID-19 Omicron option in China ”.

In turn, MOMR warns that “global oil demand is projected to average 100.3 mb / day, which is 0.2 mb / day lower than in the estimates of the previous month and about 0.1 MB / day higher than in 2019 “, and eExpectations of declining demand may keep OPEC on a given recovery rate even though “OPEC oil demand in 2022 was revised by 0.1 mb / day compared to the previous month and amounted to 29.0 mb / day, which is about 0.8 mb / day higher, than in 2021 ”.

Image of the weekly EIA for crude oil production in the United States

As a result, signs of limited supply could cause oil prices to rise as U.S. production narrows for the first time since January, with weekly oil production down to 11,800,000 in the week ending May 6 from 11,900,000 in the previous week.

That said, the price of oil may continue to show a bullish trend, as it largely tracks a positive slope in the 50-day SMA ($ 105.00), and oil may try to roll back. decrease from the annual high ($ 130.50) as it clears the opening range for May.

Daily crude oil price chart

Image of the daily schedule of crude oil prices

Source: Trade view

  • The price of oil clears the monthly opening range as it expands a number of highs and lows from last week, with a break / close above $ 112.80 (up 161.8%) to $ 113.70 (up 78.6%) region pushing oil to $ 115.00 (23.6% rollback).
  • The price of oil can try track decline from annual high ($ 130.50) apparently it tracks a positive slope in the 50-day SMA ($ 105.00), but needs a break / close above $ 115.00 (23.6% rollback). to open an area of ​​$ 117.20 (78.6% rollback).
  • The next area of ​​interest is about $ 120.90 (100% expansion), with a break above the annual high ($ 130.50), leading to $ 141.50 (161.8% expansion) on the radar.
  • However, the failure of breakout / close above handle $ 115.00 (23.6% rollback). could push the price of oil to the area of ​​$ 108.10 (an increase of 61.8%) with a movement below 50-Day SMA ($ 105.00) returning to the radar region $ 104.20 (50% extension).

— Written by David Song, currency strategist

Follow me on Twitter at @DavidJSong


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