After trading at a high of $70.57 per barrel, crude oil price slipped to a low $67.1 last week. Prices have been slightly down since Monday after trading between $68.22 and $69.44 per barrel.
Crude oil prices dropped as Asian governments tightened lockdowns to cope with the highly infectious Delta variant that led to the reduction in fuel demand.
Dailyfx.com analyst Warren Venketas said on Tuesday that crude oil prices are not far away from pressure as “[…] state-owned Saudi Aramco cuts prices for the October shipment to Asia – excluding the US and Europe.
“The price per barrel or official selling price (OSP) was reduced from $1.70 to $1.30 surprising market expectations which forecasted a much smaller markdown.”
Oilprice.com’s Tsvetana Paraskova said on Tuesday that Saudi Arabia’s move to slash oil export prices to Asia in October “more than expected in a move seen as the world’s largest crude exporter trying to keep and boost its market share […].”
Reuters meanwhile reported on Monday that “global oil supplies are also increasing as the Organization of the Petroleum Exporting Countries and their allies, a grouping known as OPEC+, is raising output by 400,000 barrels per day a month between August and December.”
The increasing output of OPEC+ in such a period of time amid the lower consumption could convince investors to follow the trend.
As of Tuesday, the price of crude oil did not change significantly as the crude market opened at $68.80 per barrel.
Even though the crude oil price chart is forming a long-term uptrend outlook, the given fundamentals above could make its prices stable or further decline temporarily.
For this week’s trading recommendation, investors should consider trading crude oil between $67and $70 per barrel.
Analysis by Golden FX Link Capital business manager Nhim Kosol