USOIL opened August as weak notice
Oil rose almost $4 after swinging in a choppy session as traders counted down to an OPEC+ crude production meeting.
USOIL settled above $94 after trading in an almost $4 range on Tuesday. As a result of concerns that Nancy Pelosi’s visit to Taiwan would intensify tensions with China, the markets were on edge earlier in the session.
OPEC+ is scheduled to meet virtually on Wednesday to decide output policy for September. Some oil watchers are skeptical that OPEC+ will fulfill President Joe Biden’s call for more oil supplies, expecting it to preserve its remaining capacity for later. Recently, the bullish pattern in oil’s price has narrowed amid signs that physical markets have eased in the weeks leading up to the meeting.
OPEC+ is expected to refrain from delivering an output increase, and China’s immediate retaliation against Pelosi’s visit to Taiwan is symbolic but not enough to threaten the global supply chain.
As a result of concerns about demand, oil has opened August on a weak note. The drop has wiped out almost all of the gains seen since Moscow’s invasion of Ukraine in late February, even after Washington and the European Union imposed a raft of sanctions on Russian energy exports.
The OPEC+ meeting comes after US President Joe Biden urged Saudi Arabia to pump more oil on a visit to the kingdom last month. All supplies that the alliance took offline after the outbreak of the pandemic have already been returned, although some members are still unable to meet their quotas.
Libyan production recovered and signs emerged of weaker US gasoline demand. The differential was $2 a barrel on Tuesday, down from near $4 about a month ago.
Trade recommendation, oil investors may placing the sell order at $95.50 putting a protective stop at $98.50 and taking profit at $90.
Analyzed by: Mr. Nhim Kosol Business Manager of PP Link Securities
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