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Oil continues to rise despite the setbacks

Olymp Trade

Brent updated the annual maximum at the end of last week, but it turned out to be just a bit higher than the previous one. The upper limit of the medium-term price channel described in our previous review is still a support level for the current trend. The $71 a barrel zone is an area of buyers’ interest. Nevertheless, it is noticeable that the price updates its highs with some difficulties, and the RSI oscillator shows divergence between the chart and the indicator line. This can be a sign of a local correction to $69-70.

On Friday, Baker Hughes oilfield services provider reported that the number of operating drilling rigs in the United States increased by 2 units from last week to 833. This could be a signal production growth in the US. And oil production in the US last week remained at the record high level of 12.2 million barrels a day (b/d).

The EIA forecasts that the oil production at the seven largest shale deposits of the country in May will increase by 80 thousand b/d - up to 8.46 million, compared to 8.38 million b/d in April. An increase in shale oil production in the United States is holding back the prices.

The restraint in the market is also caused by a comment on oil market segmentation made by Russian Finance Minister Anton Siluanov at the weekend:

“Now there is no solution yet, this question is still being discussed ... "There is a dilemma. What should we do with OPEC: should we lose the market, which is being occupied by the Americans, or quit the deal."

Therefore, OPEC and Russia may increase production in order to stop giving the United States a share in the global market. The countries will have to decide on this issue in June.

Olymp Trade Review

Source: https://olymptrade.com/
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