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Fundamentals

During the Asian session on Wednesday (July 19), WTI crude oil fluctuated in a narrow range, currently trading near $75.3 per barrel; yesterday at 8:30 p.m., it was announced that the U.S. retail sales data rose 0.2%, weaker than the expected 0.5%, and the previous value was revised upward to 0.5%. The U.S. retail sales data was mixed, and the dollar's reaction is to fall first and then rise. At the same time, the night session of crude oil also began an upward surge, out of the daytime oscillation range. The most important factor is still the market's concern about the possible tightening of future crude oil supply. On the one hand, Russia is in accordance with the plan to voluntarily reduce the export of 500,000 barrels per day in August, and the third quarter will reduce the export of 2.1 million tons of oil. On the other hand, Saudi Arabia's crude oil exports slipped to 6.93 million barrels per day in May, the lowest level since October 2021, down about 5.3% from 7.32 million barrels per day in April. Perturbation of the supply for the oil market will be larger, and if the inventory is significantly destocked, perhaps the U.S. crude oil up to 80 platform is just a matter of time.

As for the data, U.S. retail sales monthly rate in June is 0.2%, lower than the expected value of 0.5 and the previous value of 0.3; U.S. industrial output monthly rate in June is -0.5%, lower than the expected value of 0 and the previous value of -0.2; the U.S. NAHB housing market index in July is 56, unchanged from the expected value of 56 and the previous value of 55; the overall data is negative to some extent.

As for the news, Russia will raise its oil export tariff to $16.9 per ton on August 1st. Also, it will cut oil exports by 2.1 million tons in the third quarter, in line with its plan to cut production by 500,000 barrels per day in August.

As for the inventory data, the data released by the American Petroleum Institute (API) showed that U.S. crude oil inventories fell by about 800,000 barrels last week, gasoline inventories decreased by about 2.8 million barrels, and distillate inventories decreased by about 100,000 barrels.

Today's focus is EIA crude oil inventory data. Investors can also pay attention to the OPEC+JMMC meeting on August 3rd.

Technical Analysis

In the daily chart, U.S. oil first fluctuated above 74 yesterday and repeatedly stepped on the validity of the support. The evening market appeared to pull-up rebound, the high point of the surging-high pressure test is 76, and the daily chart closed a bull candle. The market is still in the parallel divergence that all moving averages are running upward. MACD is also in a comfortable position to keep the golden cross. In the short term, the market's strong posture will be unchanged. From the structure of the U.S. oil daily chart, the current U.S. oil retracement has been completed. Although there may not be too strong in rising, it is certain to maintain a strong state.

As for the intraday operation plan, intraday U.S. oil may be first in a certain retracement. The following focus is the support of a 10-day moving average of 74.7, and if the market retracement is in this area, aggressive investors can consider can go long. The stop loss is 73.7; the target is at 75.5-76, and in this area, you can reduce positions and move the stop loss to breakeven to stop loss. The remaining positions can be used for swinging trading and targets are at 77, 78, or even 80. In the intraday operation, you can reduce or not consider going short in the short term.

Trading Recommendations

Trading direction: Long

Entry price: 74.700

Target price: 76.800

Stop loss: 73.700

Support: 74.700, 73.700

Resistance: 75.500, 77.300