At the beginning of the week volatility in the oil market remains limited and WTI prices is still hovering ahead of several-year highs. The factors that support demand are, among others election results in Venezuela. President Maduro announced his victory in the vote, which was a farce in the eyes of the opposition and international organizations. Such a development of events is not a surprise but threatens with new sanctions from the US, which would remove some of the country's exports from the global market. Estimates by Bloomberg say that the extraction is currently only just over 1.5 million barrels per day. For comparison: in September about 0.5 million barrels more were mined. It was the lack of access to raw material from this country that was largely responsible for the tightening of the situation on the raw material market. There is also a growing geopolitical risk in the Middle East. The US Secretary of State once again sharpened the rhetoric towards Iran. Investors will certainly be waiting for API and Department reports on inventory changes in the last week. Previous information was very inconsistent and the oil rally was caused especially by the industry's slightly undermined information on the record-breaking 2.5 million barrels of US oil exports.
Let's now take a look at the Crude Oil technical picture at the H4 time frame. In the current situation, there is not much justification for the strong oil rises - most factors are already priced in by the markets. At the same time, the market undoubtedly remains in the mode of buying corrections and the sequence of higher highs and higher lows are still continuing. The market has managed to make another high at the level of 72.70, but there is no follow up in the momentum, in contrary, the momentum is diverging from the price more and more. The immediate support is seen at the level of 72.27 and 71.91, but only a sustained violation of the level of 70.24 would signal a more deeper pull-back in progress.
