Oil prices try to rebound from major supports
Oil prices have been trying to get higher since last week after returning to test major supports at $85 for WTI and $95 for Brent. Growing fears about the global economy are putting pressure on oil prices, but the market remains very tight due to significant supply-side constraints.
The main support for oil prices is Western sanctions against Russia. Russia’s total exports have been falling since the sanctions began.
OPEC+ is also supporting oil prices by deciding to cut production in September for the first time in over a year. The cartel also indicated that it could now organize an emergency meeting at any time to adapt its production.
The potential Iranian nuclear deal between Tehran and Washington may at first sight ease pressure on the market and put pressure on oil prices, but any increase in Iranian exports should be offset by an OPEC+ oil cut.
In addition to the global economic slowdown, oil sales from US strategic reserves (1 mbd) are also helping to ease the market and therefore put pressure on oil prices. These sales will end at the end of October and are unlikely to be extended due to low US reserves and given OPEC+’s current difficulties in meeting its production targets, the market could therefore find itself deficit of one million barrels per day by the end of the year.
WTI Oil Price Daily Chart (US Light Crude CFD) – Key Levels