G7 Countries Agree to Phase Out Russian Oil, But USOIL Drops

  • USOil
    (${instrument.percentChange}%)

USOIL Analysis

The United States and the rest of the G7 countries pledged more support for Ukraine over the weekend and committed to phase out Russian energy, including oil imports [1]. Meanwhile, Mr Putin did not announce any policy changes today, in his Victory Day speech and did not change the "special operations" status of the invasion in Ukraine. [2]

Furthermore, he accused the NATO of an "active military build-up" on the adjacent territories and spoke of "an absolutely unacceptable threat" created at his country's borders.

Market participants continue to monitor the Covid-19 situations in China, after Friday's commitment to the zero-Covid policy by the country's leadership [3]. Mainland China reported 4,260 locally transmitted (with symptoms and asymptomatic) for May 8, from 4,384 in the previous day. [4]

The pandemic and the aggressive containment measures, have an impact on the economic and trade activity of the world's second largest consumer of oil. Today's data showed that China's exports grew just 3.9% year-over-year in April, from 14.7% in the prior month.

US OIL started the week with losses amidst risk aversion, which expose it to the EMA200 (at 103.50). Daily closes below it could pause upward bias and open the door for the ascending trendline form December's lows (at around 98.80), but this may prove hard.

Despite today's retreat, the commodity comes from a three-day advance and bulls have not given up control. As such, they have not lost the ability to push back towards 111.38, but 116.66 seems distant form now.

Nikos Tzabouras

Senior Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 09 May 2022 https://www.whitehouse.gov/briefing-room/statements-releases/2022/05/08/g7-leaders-statement-2/

2

Retrieved 09 May 2022 http://en.kremlin.ru/events/president/news/68366

3

Retrieved 09 May 2022 https://english.www.gov.cn/news/topnews/202205/06/content_WS62747913c6d02e533532a4de.html

4

Retrieved 02 Jul 2022 https://english.www.gov.cn/statecouncil/ministries/202205/09/content_WS6278839cc6d02e533532a725.html

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