Taking into account recent speeches, it seems that many of the oil producing countries in the world think that the price of oil is too high. Let’s start with … Trump.
“The OPEC Monopoly must remember that gas prices are jumping, and they do little to help” Trump wrote on Twitter.
On 30 June, again Trump, talks with Saudi Arabia to increase the country production by 2m. barrels a day, or this is twice as much as the reached agreement between OPEC+ for yield growth of up to 1m. barrels per day.
Earlier today, it became clear that Russian oil companies are also discussing an increase in mining in the country.
Given the higher oil reserves in the US, 1.245m vs. -5.0m. I expect oil to mark a further drop from the peaks. Technically speaking, the price still can not go below the previous peak, but given the foundation, I expect this to happen in the near hours. Passing below the transition peak will increase the negative moods, then the internal diagonal test and 50SMA will be the most likely scenario. From the point of view of indicators, we have a number of short-term signs. DeMarker turns and points down from an overpurchase zone, and Sequential first counts 9th on top of the upward movement. In addition, we also have a down arrow – negative for the price. After the downgrade today, the indicator is also counting down from the bottom one – the start of a new bearish momentum. I expect the decrease to continue, first to the internal diagonal that was once broken, and if it drops once more to the main diagonal in the support area between $ 61 and $ 62 per barrel.
Alternative Scenario: If the price registers a new peak and stays there in several consecutive bars, the negative scenario will be spoiled and more likely to see a decline.
Chart: Used with permission of Bloomberg Finance L.P.
Trader Petar Milanov