Yesterday crude oil Brent has increased significantly reaching the level of 58.09 USD per barrel. The price of the “black gold” soared up amid the news from Saudi Arabia. According to Bloomberg Saudi state-owned company Saudi Aramco announced that the price of crude oil Arab Light will increase by 30 cents per barrel for the Asian buyers.
Recently, energy market is in jeopardy of oversupply due to approvals of the nuclear program of Iran. However, following the agreement of lifting of the American sanctions, market participants realized that in the near future oil from Iran will not enter the market. Suspension of sanctions can take place during the year; nevertheless it will take at least 6 months for Iran in order to increase supply to the world market up to 1 million barrels. It means that until 2015 oil export from Iran will not affect world prices in the hydrocarbon market.
Today, statistics on crude oil inventories, as per API (American Petroleum Institute), will become known. Commercial oil reserves in the USA (excluding strategic reserves) will remain at the 80-year highs. However, it is expected that the volume is going to drop, due to the decrease in number of drilling rigs operating in the USA: last week their number has dropped up to 802.
Support and resistance
Support levels: 57.12 (lows of last Friday), 56.00 middle line of Bollinger bands), 55.02 (yesterday’s lows), 53.87 (last Friday’s lows).
Resistance levels: 58.09 (yesterday’s highs), 58.60 (upper line of Bollinger bands), 60.00 (important psychological level), 61.53 (highs of 5 March).
Sell orders can be placed above the level of 57.00 with the first target of 56.00 and the second target of 55.10. Long-term buy targets are the levels of 60.00 and 61.50.