Selling pressure on OIL continues, although declines have been already reduced 🔴
Return of supply from Libya
Oil has been strongly retreating since last evening after reports about the appointment of an interim central bank governor in Libya by both governments in the country. It is worth noting that the central bank governor oversees revenues from the extraction and export of oil. This is precisely why the conflict over the candidate led to an almost complete halt in production from the areas controlled by the eastern government in the second half of August.
Saudi Arabia may increase production
Additionally, there are reports that Saudi Arabia is considering increasing production faster to regain lost market share. According to the Financial Times, Saudi Arabia has fully abandoned the goal of $100 per barrel for Brent crude. It is worth recalling that in 2014 and initially in 2020, Arab countries did not want to reduce production, which led to a significant price retreat, with the aim of forcing American producers to reduce production as well.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appKey countries want a ceasefire in the Middle East
Saudi Arabia, Qatar, the USA, and the European Union are working on solutions to bring about a ceasefire between Israel and Hezbollah operating in Libya.
Further stimulus measures from China and a statement from Russia's Novak
According to Novak from Russia, there is currently no plan to delay the timing of production increases in OPEC+. These words likely had the most significant impact on limiting the price increase in the oil market. Additionally, today, there were speculations that the Chinese government would recapitalize banks to the tune of $1 trillion to support the recovery.
OIL.WTI (D1 interval)
At the time of publication, oil is down over 1.80% to $68.50 per barrel. The declines have been somewhat reduced, as in the first part of the day, oil was down 3.80% to $67.20 per barrel. Levels around $65-67 represent a significant support zone, also based on fundamental data such as production costs, and have not been permanently breached since mid-2021. In the case of a rebound, levels above $70 up to $73 should be considered, as they represent the nearest resistance zone.
source: xStation 5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
