Starting this week, oil traded sideways from its prior low of $82.62 per barrel to a previous high of $85.98 as traders continued to balance weaker demand prospect against constricted supplies of crude.
After trading within a narrow three-dollar range for four consecutive days, crude oil prices remained near $85 per barrel, with further demand signals awaited ahead of likely reductions in supply.
“Since late September, crude prices have been bouncing in a range of about $17 as traders weigh interest rate hikes that menace economic growth against planned output cuts from the Organization of Petroleum Exporting Countries and its allies,” Bloomberg reported.
A reduction of two million barrels per day (bpd) in crude oil production target was announced by OPEC+ early this month, angering the US.
There will be some consequences for Saudi Arabia for its decision with Russia to steer OPEC+ into a large oil production cut, US President Joe Biden said a week after the OPEC+ meeting, Oilprice reported.
And in an effort to reduce gasoline prices, the Wall Street Journal said, President Biden is ordering the release of 15 million barrels from the Strategic Petroleum Reserve (SPR) three weeks before the US midterm elections.
Meanwhile, after Beijing said it was deeply frustrated by new US export controls on chips, China signalled it may ease its strict Covid border restrictions.
The market was losing price momentum slowly in Wednesday trading sessions, with technical analysis indicating that the price of oil is still trading in the range of $84.75 per barrel, with that range above the average price over 50 days.
Market sentiment is still uncertain. Therefore, this week oil investors may trade with a buy position at $83 per barrel, setting the stop-loss function at $80.50 per barrel and the take-profit at $86.
Alternatively, they could set a sell position at $85.50 per barrel, with the stop-loss function at $87 per barrel and the take-profit at $83.