February 06, 2023 04:26 GMT
Crude Trading Sideways After Friday’s Sharp Drop
Oil prices have been trading sideways during Monday’s APAC session after falling sharply on Friday. Prices were down on fears that China’s recovery would not be as robust as expected and the prospect of further US rate hikes while stockpiles are high. WTI is currently trading around $73.50/bbl and Brent $80.15.
- WTI broke through support at $74.97, the February 2 low, on Friday and now the level to watch is $72.74, the January 5 low. The bear trigger is at $70.56, the December 9 low. For Brent, watch support at $77.77, the January 5 low.
- The G7 and EU and Australia agreed to introduce a price cap of $100/bbl on Russian seaborne exports of high quality products such as diesel and $45 for the lower end ones such as fuel oil. The market expects other countries to import Russian product thus there’s unlikely to be a supply disruption. The Saudi energy minister warned that sanctions against Russia could result in an energy shortage but that they remain very cautious about increasing output despite this and the improved oil demand outlook from China.
- There is little scheduled later with January euro area retail sales the most significant release. It is a relatively quiet week in the US with Tuesday’s trade balance and Fed Powell’s speech the likely highlights.