Topic: Crude Oil
Brent Crude Oil prices are consolidating near 104.00, correcting after an active decline yesterday. At the beginning of the current trading week, quotes lost sharply in value in response to reports that several EU countries are still blocking the introduction of a full-fledged oil embargo on supplies from Russia.
Last Sunday, the leaders of the G7 countries held talks via videoconference, within which the decision to phase out energy resources and ban the import of "black gold" from Russia was supported. Against this background, the participating countries pledged to cooperate on the issue of ensuring the stability of supplies, finding suppliers, and reducing fuel dependence. Meanwhile, negotiations in the EU concerning new sanctions under the sixth package of economic restrictions on the supply of Russian oil and petroleum products ended unsuccessfully. The representatives of Hungary voted against them, as the country's dependence on supplies from the Russian Federation is about 60%, and this blocking does not yet allow the introduction of a pan-European embargo. The next round of negotiations can be started today, but the head of the European Commission, Ursula von der Leyen, said that progress in discussing the issue with the country's leader Viktor Orban is noticeable.
Meanwhile, Saudi Arabia adjusted Arab Light crude prices to 4.40 dollars per barrel for June Asian deliveries for the first time in four months. The indicator dropped significantly compared to the May value of 9.35 dollars. The decline is due to the current uncertainty in the oil market and, in particular, a possible ban on the supply of Russian "black gold" due to the escalation of the military conflict in Ukraine and the strengthening of quarantine restrictions in China. The country's authorities, adhering to the policy of "zero tolerance" regarding the spread of COVID-19, introduced quarantine in Shanghai and Beijing, which led to a noticeable decrease in demand in the oil market.
On Tuesday, traders will focus on the publication of the American Petroleum Institute (API) on stocks in the US for the week of May six. The previous report reflected a sharp decline of 3.479M barrels.
Resistance levels: 106, 109, 112, 115.5 | Support levels: 102.57, 100, 96.5, 93.34