Jump to content

Crude Oil Price Rebound Emerges as US Output Holds Steady Coming into July

Recommended Posts


The price of oil appears to be reversing course head of the 200-Day SMA ($92.62) as it holds above the April low ($92.93), and crude may stage a larger rebound over the coming days as US production holds steady at the start of July.


The price of oil extends the rebound from the weekly low ($95.10) even as US inventories unexpectedly increase for the first time in three weeks, and crude may attempt to retrace the decline from the monthly high ($111.45) as the Relative Strength Index (RSI) bounces back ahead of oversold territory.

Image of DailyFX Economic Calendar for US

However, indications of slowing consumption may produce headwinds for crude as US inventories jump 8.235M in the week ending July 1 versus forecasts for a 1.043M decline, and current market conditions may keep a lid on crude prices as the Organization of Petroleum Exporting Countries (OPEC) plan to “adjust upward the monthly overall production for the month of August 2022 by 0.648 mb/d.”

It remains to be seen if OPEC will retain the current production schedule over the remainder of the year amid the weakening outlook for demand, and developments coming out of the US may influence crude prices as the recent rise in oil output appears to be stalling.

Image of EIA Weekly US Field Production of Crude Oil

A deeper look at the figures from the Energy Information Administration (EIA) show weekly field production printing at 12,100K for the second week, and signs of limited supply may lead to a near-term rebound in the price of oil as it appears to be reversing course head of the 200-Day SMA ($92.62).

With that said, failure to test the April low ($92.93) may keep the price of oil within a defined range ahead of the next OPEC Ministerial Meeting on August 3, and crude may attempt to retrace the decline from the monthly high ($111.45) as the Relative Strength Index (RSI) bounces back ahead of oversold territory.


Image of Crude Oil price daily chart

Source: Trading View

  • The price of oil appears to be reversing course ahead of the 200-Day SMA ($92.62) amid the failed attempt to break/close below the Fibonacci overlap around $93.50 (61.8% retracement) to $95.30 (23.6% expansion), and crude may stage a larger rebound as long as it holds above the April low ($92.93).
  • The Relative Strength Index (RSI) highlights a similar dynamic as it bounces back ahead of oversold territory, but need a close above the $104.20 (50% expansion) region to bring the $108.10 (61.8% expansion) area back on the radar.
  • A move above the 50-Day SMA ($110.10) may push the price of oil towards the monthly high ($11.45), with the next area of interest coming in around $112.80 (161.8% expansion) to $113.70 (78.6% expansion).
  • However, failure to close above the $104.20 (50% expansion) region may keep the price of oil within a defined range as the 50-Day SMA ($110.10) no longer reflects a positive slope, with a move below $100.20 (38.2% expansion) raising the scope for another run at the overlap around $93.50 (61.8% retracement) to $95.30 (23.6% expansion).

David Song, Currency Strategist, DailyFX
Follow me on Twitter at @DavidJSong
08 July 2022


Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
    • Total Posts
    • Total Members
    • Most Online
      10/06/21 10:53

    Newest Member
    Joined 07/02/23 17:19
  • Posts

    • Look Ahead to 08/02/23: Oil inventories; TTEF, DIS, UBER and BDEV earnings Oil, tech, and the consumer are set to dominate the markets on Wednesday, with earnings from TotalEnergies (TTEF), EIA data, and results from Walt Disney (DIS) and Uber Technologies (UBER). Angeline Ong | Presenter, Analyst and Content Editor, London | Publication date: Tuesday 07 February             
    • 07 February 2023 Spot Gold The price of gold has extended its pullback from overbought territory over the last week and has found some near-term support at the 50-day simple moving average (50MA) (green line). Our preference remains to look for long entry on a bullish price reversal. A bullish reversal might be considered if we can see price closing above the 1875 level, provided that the 50MA is not broken with a price close below. Should the 50MA level be broken and the price reversal not confirm, 1820 becomes the next downside support target from the move. In this scenario we not looking to short gold but would rather be looking for a bullish price reversal closer to this level for long entry once again. Should either of these scenarios manifest we will update our guidance accordingly with resistance targets and stop loss considerations. Source: IG charts       Brent Crude Oil The bearish reversal off the 8770-level guided in our previous note has yielded a significant decline, although fallen short of the 7760-support target. The price now looks to be rebounding from oversold territory. Traders who have been short might consider this an indication to exit their trades. The longer-term trend bias is still considered down and should a bearish price pattern emerge before this level, new short entries might be considered. In this scenario a close above the 8770 level might be used as a stop loss consideration, while targeting a move back towards the support low at 7760 once again. Only on a move / close above the 8770 level would the longer-term trend bias be reassessed, and long trades reconsidered Source: IG charts         Our weekly technical report is compiled by in-house senior market analyst, Shaun Murison.
    • Hi, the basic package has a 15 minute delay.
  • Create New...