Oil drops on Druzhba pipeline news and U.S. inflation expectations
10 Aug 2022
Brent Crude Oil is trading down 1.51% at 94.11
Oil prices fell on Wednesday on expectations that Druzhba pipeline flows will resume shortly and demand concerns ahead of publication of key demand indicators.
Brent crude futures were down $1.69, or 1.75%, to $94.62 a barrel at 1124 GMT.
U.S. West Texas Intermediate crude futures were down $1.61 cents, or 1.78%, at $88.89.
Russia’s pipeline monopoly Transneft said it planned to resume oil pumping through the southern branch of the Druzhba pipeline at 1600 Moscow time (1300 GMT), Russian state-owned news agency RIA reported.
Ukraine had suspended Russian oil pipeline flows to parts of central Europe since early this month because Western sanctions prevented it from receiving transit fees from Moscow, Transneft said on Tuesday.
Hungarian energy group MOL has transferred the transit fee for the use of the Ukrainian section of the pipeline, MOL said on Wednesday.
The U.S. consumer price index (CPI) report, due to be released at 1230 GMT, will be scrutinised for a steer on how steeply the U.S. Federal Reserve will raise interest rates in the coming months.
The report is likely to show underlying inflation pressures remain elevated as the Federal Reserve considers whether to embrace another supersized interest rate increase in September, which could curb economic activity and fuel demand.
U.S. crude oil stocks, meanwhile, rose by about 2.2 million barrels for the week ended Aug. 5, according to market sources citing American Petroleum Institute (API) figures. Analysts polled by Reuters had forecast crude inventories would rise by about 100,000 barrels.
On technical fronts Brent Crude Oil RSI stood at 37.95 and currently it is trading below all MA. So, SELL position can be taken with following target and stoploss:
TRADE SIGNAL – : Brent Crude Oil – SELL: 94.13, TARGET: 92.33, STOP LOSS : 96.18