Crude oil price is trading near recent highs after the U.S. Energy Information Administration (EIA) reported that crude oil production would reach record levels in 2023. According to EIA, crude oil prices will remain high enough to spur growth in crude oil production through 2023.
U.S. Energy Information Administration also announced this Wednesday that U.S. oil inventories fell by 4.8-million barrels last week when most analysts expected a rise in oil inventories.
Investors continue to watch carefully geopolitical turmoil after Russia began military exercises with Belarus, which could be viewed as preparing for an invasion of Ukraine.
Russia is the third oil producer globally, and the country faces international sanctions should it move against its neighbor. Concerns about ongoing threats to supply have a positive influence on the price, but a possible U.S. and Iran deal could unleash more oil into global markets, which could add pressure on prices.
Talks between the U.S. and Iran are moving in the right direction, which could result in the re-entry of over one million barrels of oil into the market. Claudio Galimberti, senior vice president of analysis at Rystad Energy, added:
An agreement could lift U.S. sanctions on Iranian oil and quickly add supply to the market, although a number of vital issues need to be resolved. It doesn’t look like the Iranian deal is going to be signed tomorrow, but there are some positive developments there.
The crude oil demand is still improving on the return to normal travel behavior in large parts of the world, and according to the Organization of the Petroleum Exporting Countries, the crude oil demand should continue to grow.
Crude oil prices also reacted positively after the U.S. released the Nonfarm Payrolls report for January, which showed that the country added 467K jobs.
The job report surpassed economists’ estimate of 150K for January and shrugged off concerns about the impact of the COVID-19 omicron variant on the labor market.
On the other side, the world continues to fight with high numbers of new daily infections, which leads to staffing issues across industries. The battle against coronavirus is still not over, but the positive information is that many countries removed some restrictions this month.
$95 represents first resistance
Data source: tradingview.com Crude oil is trading currently slightly below $90, and according to rules of technical analysis, the positive trend remains intact.
Rising above $95 supports the continuation of the bullish trend for crude oil; still, if the price falls below $85, it would be a firm “sell” signal, and the next target could be around $80.
SummaryCrude oil price is trading near recent highs after the U.S. Energy Information Administration (EIA) reported that crude oil production would reach record levels in 2023. According to rules of technical analysis, the positive trend remains intact, and rising above $95 supports the continuation of the bullish trend for crude oil.
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