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Summary: International crude oil rose slightly on Thursday, on track for its longest streak of gains since January. This period coincides with production cuts by major OPEC+ producers, which are expected to extend through October.

Fundamentals

Brent crude prices could approach $90 a barrel if Saudi Arabia extends its production cut program for another month. Saudi Arabia is expected to announce its production cuts for October in a few days. The 1 million barrels per day (bpd) cuts have been in place for two months, and the Saudis have already stated that they will extend the cuts through September.

So far, Saudi Arabia's cuts have been taken alongside Russia, the other major OPEC+ member, and if the cuts are extended into October, Russia is likely to commit to cutting oil exports at the same time, which would collectively push the price of Brent oil closer to $90 per barrel.

Iranian oil exports increased in August to the highest level since this year as major OPEC+ producers Saudi Arabia and Russia rein in their own oil exports in an effort to tighten the market.

Transportation of Iranian crude oil and condensate climbed to 1.85 million bpd in August, according to data from TankerTrackers.com. This was a retreat from the first 20 days of August, when exports exceeded 2 million bpd. However, the market believes that earlier data may have been inflated by sales of stockpiled crude. Iran has been steadily increasing its oil exports this year and has found buyers in Asia for its discounted supplies. The country's output is now at its highest level since the export ban was imposed five years ago. U.S. officials have privately acknowledged that they are gradually easing the implementation of some of the measures.

Technical Analysis

On Thursday, WTI crude oil exhibited a channel-like upward trend within the hourly timeframe. Higher lows and higher highs have formed within the new ascending channel that has been maintained since last week.

The Fibonacci retracement tool indicates more buying interest may be awaiting entry at certain levels. The 38.2% Fibonacci level is close to $81.00, marking a central area where bulls might await entry, while the 50% Fibonacci level stands at $80.68. A more significant correction could reach the 61.8% Fibonacci retracement level, which aligns with the channel's support and the dynamic support from the moving averages.

Speaking of moving averages, the 100 SMA has crossed above the 200 SMA, suggesting the path of least resistance is upwards, or that support is more likely to hold rather than experiencing a correction. The price also resides above both moving averages, making them potential support levels for buying on dips.

The stochastic oscillator has some room for further upside before reaching overbought territory, reflecting potential exhaustion among the bulls. However, the relative strength index (RSI) has started to decline, indicating increasing selling pressure and the possibility of continued correction until oversold conditions are met. In terms of trading strategy, it is recommended to buy low and sell high.

Trading Recommendations

Trading Direction: Short

Entry Price: 83.30

Target Price: 79.10

Stop Loss: 84.80

Valid Until: 2023-09-14 23:55:00

Support: 82.00, 81.65, 81.13

Resistance: 82.88, 83.24, 84.30