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.
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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
