On Wednesday morning (January 8th) in the Asian market, international oil prices fluctuated slightly higher, approaching the three-month high set on Monday. US crude oil is currently trading around $74.71 per barrel, up about 0.6%; Brent crude oil is currently trading around $77.37 per barrel, with an increase of approximately 0.35%. Oil prices rose more than 1% on Tuesday, driven by concerns about supply constraints from Russia and Iran due to Western sanctions, as well as expectations of increased demand from major Asian countries. In addition, API crude oil inventories have decreased, and surveys show that OPEC production declined in December.

Brent crude oil closed at $77.05 per barrel on Tuesday, up 75 cents or 0.98%. US crude oil closed at $74.25 per barrel on Monday, up 69 cents or 0.94%.

According to Razan Hilal, a market analyst at Forex, supply is tight after the Christmas and New Year holidays, and traders expect China's stimulus plan to drive economic growth.

Although the market is currently in a range of fluctuations, it has recorded gains against the backdrop of improved demand expectations driven by holiday traffic and China's economic commitments, "Hilal said in a morning report." However, the main trend remains bearish

Concerns about tightening supply due to sanctions have translated into an increase in demand for Middle Eastern oil, reflected in Saudi Arabia raising its oil sales prices to Asia in February for the first time in three months.

US economic data is relatively optimistic, boosting demand expectations

The US Department of Labor Job Openings and Labor Mobility Survey (JOLTS) shows that as of the last day of November, job vacancies measuring labor demand increased by 259000, reaching 8.098 million. However, the number of recruits in November decreased by 125000 to 5.269 million.

The service industry activity in the United States also accelerated in December, with an indicator measuring input prices soaring to its highest level in nearly two years, suggesting that inflation remains high. The Non Manufacturing Purchasing Managers' Index (PMI) of the Institute for Supply Management (ISM) in the United States rose from 52.1 in November to 54.1 in December.

API crude oil inventory decreases

According to data from the American Petroleum Institute (API), US crude oil inventories decreased last week while fuel inventories increased.

Specific data shows that in the week ending January 3rd, crude oil inventories decreased by 4.02 million barrels, gasoline inventories increased by 7.33 million barrels, and distillate oil inventories increased by 3.2 million barrels.

Analysts surveyed by Reuters predict that US crude oil inventories decreased by 200000 barrels last week, gasoline inventories increased by 1.5 million barrels, and distillate inventories increased by 600000 barrels.

The official inventory data of EIA will be released at 23:30, and investors need to pay attention. In addition, pay attention to the ADP employment data for January in the United States.

Survey: OPEC oil production declines in December after two consecutive months of growth

A Reuters survey shows that OPEC oil production declined in December after two consecutive months of growth, due to a decrease in oil production in the United Arab Emirates due to oil field maintenance, as well as a decrease in oil production in Iran, offsetting the increase in oil production in Nigeria and other regions of the organization.

Tuesday's survey showed that the Organization of the Petroleum Exporting Countries had a daily production of 26.46 million barrels last month, a decrease of 50000 barrels from November, with the United Arab Emirates experiencing the largest decline.

Due to concerns about global demand and increased production in countries outside of OPEC+, OPEC+continued to implement production cuts in December. OPEC+decided last month to postpone its plan to increase production until April.

The investigation found that the country with the largest reduction in OPEC production is the United Arab Emirates, at 90000 barrels per day. A source said that oil field maintenance is the reason for the decline in production, with investigations showing production at 2.85 million barrels per day.

Despite being sanctioned by the United States, Iran's production last year still reached its highest level since 2018. The investigation found that Iran reduced production by 70000 barrels per day. Goldman Sachs and other analysts predict that incoming US President Trump may soon strengthen sanctions to curb Iran's production.

The investigation found that OPEC's top two oil producing countries, Saudi Arabia and Iraq, have maintained stable production, with the organization's output below the implied target of the nine member countries covered by the supply agreement. Nigeria has the highest degree of overproduction.

The survey found that among countries that have increased production, Nigeria has increased production by 50000 barrels per day, reflecting an increase in domestic usage and export volume at refineries such as Dangote. Nigeria announced in December that its Warri refinery has resumed partial operations after years of shutdown.

Libya's production also increased by 50000 barrels per day, and production continued to recover after resolving the central bank control dispute that led to the production cuts. The country is not bound by the OPEC+production restriction agreement.

Technical analysis: Brent crude oil may rise to the $78.03-78.58 range

Reuters technical analyst Wang Tao pointed out that Brent crude oil may break through the resistance level of $77.59 per barrel and rise to the range of $78.03 to $78.58, as the upward trend may have already recovered.

The price of cloth oil quickly rebounded strongly from the low of $75.91 on January 7th, indicating that the C wave will extend to its predicted level of $78.03 at 161.8%.

Once the contract climbs to that level, another key resistance level of $77.21 will be considered a breakthrough, which is the 61.8% retracement level of the downward trend since the high of $81.14 on October 8, 2024.

Breaking through this support will greatly increase the likelihood of the market returning to this high point. The support level is at $76.60, and falling below this level may lead to a price drop towards $75.72.

On the daily chart, after a brief pullback, the market broke through the resistance level of $77.08 again. The trend forecast analysis starting from $70.92 shows a target level of $78.55.