LCRUDE celebrates its continued rise after the 4th of July

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This day is Non-Farm Payrolls release day. U.S. employment growth has shown a slowdown with the unemployment rate holding steady at around 4% which gives the Fed room to control inflation without risk of recession. Today's Friday showing that annual wage growth is rising at its slowest pace in three years could put inflation on track to rise with Fed tightening. Jerome Powell this week made it appear that the country is on a "disinflationary path" and experiencing a "soft landing."

During the Asian session, oil prices have traded virtually unchanged and on track for a fourth consecutive week of gains heading towards end-April levels. Hopes of increased winter demand and supply have been pushing Brent up 7% in recent weeks and West Texas Intermediate up 9%. Yesterday the US session was closed for its 4th of July celebration with little trading and no settlement for WTI.

The bullish sentiment has been supported by intensifying geopolitical tension in the Middle East. US consumption expectations are high during the summer and hence oil has remained bullish.In addition, inventory data showed a severe drawdown of 12.2 million barrels against expectations of 700,000 barrels.In addition, Russian companies Rosneft and Lukoil will reduce their exports from the Black Sea this month.

On the other hand, Saudi Arabia's Saudi Aramco (TADAWUL:2222) has already started to cut the price of its Arab Light crude which will sell to Asia for 11.80/BBL, above the Oman/Dubai average which puts pressure on OPEC producers as supply increases outside the grouping.Looking at the chart since February this year, WTI (Ticker AT: LCrude) has formed a range moving between $87.19 and 70.59.At the moment, the bell shape has a triple structure with the checkpoint zone (POC) very much centered at $81. The RSI is currently oversold at 49.26% so a search to highs this summer would not be uncommon.The breakout zone at the highs is complicated, because of the selling debate between suppliers and it is most likely to see a continuation in the same range.
Ion Jauregui - Analyst ActivTrades




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