Crude oil prices resumed their gains at the beginning of the new week, heading again to the highest levels in nearly 70 days.
West Texas Intermediate (WTI) and Brent crude oil futures headed towards $83.25 and $86.63 a barrel each, respectively, peaking at around 12:30 am GMT.
Oil’s gains follow the recent decision of the Organization of the Petroleum Exporting Countries and its ally Russia (OPEC+) on Friday. As expected, the Kingdom of Saudi Arabia confirmed its commitment to continue reducing its oil production by one million barrels per day during September.
Also, Russia will reduce its oil exports by 300,000 barrels per day in September, compared to a reduction of 500,000 barrels per day in August.
This reduction in the supply of oil came with the exacerbation of the military conflict in the Black Sea, which led to the disruption of navigation in the port of Novorossiysk, which contributes to the market supply of crude oil by about 2%, earlier last week with the targeting of a Russian naval vessel.
Despite this, the oil markets may face downward pressure as prices are saturated unless we find more supportive factors. Where the markets are waiting for more about the plans of the Chinese authorities to support the private sector, in order to support the demand for oil, which came from the words of the ruling party in the past two weeks.
The markets are also waiting for more data to know the future trends of the global economy, and the US economy in particular. This week, tomorrow we await the Energy Information Administration’s short-term outlook report for energy markets. Also, this week, we find US Consumer Price Index (CPI) figures for July. If the inflation figures are higher than expected, we may witness the return of some strength to the US dollar, which may put pressure on crude oil prices.
As for the British economy, we are on a date with GDP figures, in which the economy is expected to grow by 0.2% during the second quarter compared to the corresponding quarter of last year.
On the technical side, and on the two-hour timeframe, Brent crude oil price faces a decisive test, as it traded within the resistance area between $86,800-85,940 per barrel, alongside the main dynamic resistance line. On the other hand, breaching and consolidating above these levels may turn buyers’ attention towards 89.330-88.580 levels next.
On the opposite side, failure to breach above the previous resistance line, this could push the sellers to press towards the dynamic support level, followed by 81.690-81.320, which is also near the SMA-200, followed also by 78.170-77.160.