Crude oil heavily bought out. Will black gold be cheaper?

We observed the first decline signals on oil, gasoline and its distillates last week. On Wednesday, January 8, data on changes in inventories on the above raw materials were published. All readings indicated later increases than expected, therefore the generated supply should slightly calm high prices mainly black gold.

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The peak behind us?

Looking at the daily interval of the oil chart, we could say that the local peak is long behind us, and the recent supply movement confirms us strongly. The fundamental factors that created this supply can be found not only in higher oil, gasoline and distillate reserves, but also in calmer moods in the Middle East. Recent price increase was caused by tensions related to US rocket attack on Iran. Without going into the details of this event, the drastic price increase has not encountered any supply withdrawal in the previous weeks.

Investors bought out?

September was undoubtedly a difficult period for oil, in which supply dominated the market. It was only October that improved, where at the beginning of the month the technical and fundamental situation of black gold looked quite good. Oil futures data for February after 59,70 (10 January) increased by 0,24%. Obviously, the data comes from information provided by the New York Stock Exchange.

Chart USD / PLN, D1 interval. Source: xNUMX XTB xStation

Looking at the daily oil chart from a technical angle, in early January we saw a break from the upward channel. Black gold later reached over $ 70 a barrel. In this area, a large supply came to the market, which was additionally supported by the aforementioned increases in inventories. The exchange rate currently exceeded the nearest support at 66, 42. Given the strength of recent declines, if the current ones were to be equally intense, the price of oil would balance at 57,33. However, we will leave margins on the depth that supply would generate. It is worth noting that we are currently at overbought levels similar to April-June, where black gold was strongly falling.