Oil Prices Surge in the Aftermath of Hurricane "Ida"

Economic events affecting the oil market

Oil prices have undergone a significant surge for the second consecutive session, particularly following Russia's crude exports reaching their highest levels in eight weeks, and the Chinese government's efforts to stimulate its economy.

Data has revealed an increase in Russia's daily crude oil exports by sea, rising by 880,000 barrels per day on a weekly basis to reach 3.4 million barrels per day during the week ending on August 27.

Furthermore, concerns have escalated over supply shortages due to the intensification of Hurricane "Ida" as it approached the US Gulf Coast of Florida after passing over Cuba. Predictions of power outages and potential impacts on oil production have added to the apprehension.

The US Consumer Confidence Index has experienced a significant decline, recording 106.1 points compared to the previous reading of just 114.0 points in July.

Market attention today is focused on the release of several crucial economic indicators, including the preliminary reading of US economic growth, as well as the ADP Non-Farm Employment Change report.

Crude oil started the third session of the week with a slight increase, trading close to the $81.52 per barrel level.

Key pivotal and technical levels that could influence oil movements

Crude oil managed to rise to the $84.00 resistance level, but it failed to surpass this barrier, subsequently retracing to establish a support level around $78.50.

If oil successfully breaches the $84.00 resistance level, it could contribute to further upward momentum, targeting the $88.00 level and potentially extending the rally to the $92.00 resistance level.

However, if oil declines and breaks below the $78.50 support level, sustained trading below this threshold may exert additional downward pressure, shifting the focus towards the $74.00 support level. A breakthrough of this level could lead to a further decline towards the $70.00 level.