Oil rally is stalling

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Arseniy Dadashev, AUFI 13 October 2021 14:26

On Tuesday, oil traded steadily, seeding slightly below the three-year highs reached around $84.60 per barrel. At the end of the day, Brent fell slightly, but remained above the $83 level. Today, at the beginning of trading, quotes were moving local lows at the moment, but they are still afloat, and the momentum of the bearish correction looks weak.

From a technical point of view, the current pause looks quite justified, given the scale of the recent rally, which to some extent overheated the market. The pullback may develop in the near future, but it is probably not worth fearing a deep fall yet, especially given the persistence of high gas prices.

In connection with the celebration of Columbus Day, the American industry statistics this week shifts by one day. Accordingly, data on reserves from the API will be presented tonight, and on Thursday the official figures of the Ministry of Energy will be released. If stocks reflect last week's increase, this will be an argument in favor of more aggressive profit-taking in the coming days.

For today, the main risk factor for Brent will be the reaction of the dollar to the report from the United States. If inflation exceeds forecasts, it will increase the likelihood of an earlier tightening of the Fed's policy and put pressure on risky assets, including oil. The nearest support at the moment is around $82.60, where the morning drop stopped. Next, the focus of the players' attention will shift to the $82 level. If growth resumes, futures will first target the $83.60 area.

Arseniy Dadashev, Director of the Academy of Financial Management and Investments

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