Norwegian offshore laborers stood on a strike on Tuesday which may reduce the output of oil and gas. Moreover, sources revealed that they are expecting a fall in oil and gas production by 89000 barrels and gas by 27500 boepd.
Due to supply disruption, crude oil traded higher in the early session of trade. Furthermore, we are expecting an upward rally in the prices of crude oil soon.
Now from Wednesday onwards, there would be a decline in the oil and gas output by 130000 barrels a day which corresponds to 6.5 percent of Norway’s production.
The major reason for this strike in Norway is to increase the wages of workers. Moreover, a sudden strike in Norway hits production by 6.5 percent of the daily production that a country produces.
The supply chain of the crude market is already impacted due to several sanctions imposed on Russian imports. Now, another concern arises which may hamper the supply chain of crude oil. Consequently, we may face global demand issues due to the abrupt strike in Norway by workers.
Let’s move on to the technical side and here is the detailed analysis
Crude oil has recently made a low of nearly around $103 and a high of $109.50. Moreover, it has a major support of $100 and major resistance of $110. If Crude closes above the level of $110 then we may witness an upside target of $118—$121.
Crude oil is trading at around $107 whereas Crude oil futures are trading at around $109. Consequently, there is a premium of $2 between spot crude and futures.
In the current scenario, it is very unlikely to breach the support level of $100. But, if that level breaks then we may witness a big sharp decline in the prices of crude oil.
For now, traders may buy crude oil at around $104 thereby maintaining a stop loss of below $100.
Moreover, if we converse about MCX then there is a major of 8200 and resistance at 8750.
If it breaches the resistance level of 8750 on a closing basis, then we may witness an upside target of 8950—9035.
Weekly closing above 9035 will open the doors for 9725 levels.
For day-to-day updates, stay tuned with us…!!