analysis.hotforex.comn Oil Ban for EU Makes Progress

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n Oil Ban for EU Makes Progress

The European Union continues to sanction  due to the invasion of e. In the sixth round of measures proposed on Wednesday which focused on increasing the pressure on  and reducing the damage in Europe, a package was proposed that seeks to ban all oil imports and reduce gas from  by the end of this year (the EU receives approximately 25% of its oil, 14% of its Diesel and 40% of its natural gas from ), eliminate the country’s largest bank Sberbank (a third of the n banking sector) along with two other banks from the SWIFT international payment network, ban the 3 largest n state broadcasters, prohibit the provision of European services to n companies and sanctions to the military involved in war crimes that occurred in Bucha and Mariupol.

“We will ensure that we phase out n oil in an orderly manner, in a way that allows us and our partners to secure alternative supply routes and minimize the impact on global markets,” Von Der Leyen said.

Until now, Germany has been one of the countries opposed to the brake on imports, being one of the largest dependents, with the focus on the Schwedt refinery, to which n oil arrives, but lately there has been a reduction in their dependency from 35% to 12%. This region is the only one in Germany that continues to depend on n oil, thanks to the fact that this refinery belongs, in majority ownership, to the n state company Rosneft. On the other hand, there is the concern of the population where said refinery is located, since the closure of this site could ruin the local economy, being the economic force of Schwedt, providing more than 90% of the fuel for the northeast of Germany, including Berlin, giving the possibility of a fuel collapse in the region as well as parts of Poland, affecting everything from drivers to the Berlin airport. As part of the solution, Berlin is considering a new law that would give the German state the power to take over energy facilities deemed crucial to national security. Economy and Energy Minister Robert Habeck has sought alternative ways to speed up the phase-out of n energies, mentioning in a video that Germany is moving away from n oil faster than expected and that an embargo on oil energy could be done without leading into a recession, although there would be a sharp rise in prices (which has already risen 40% since the beginning of the year) and there could be a shortage in the region.

Even though the UK, US, Canada and Australia are not part of the EU, they too are already phasing out n oil. The Netherlands mentioned that it wants to stop all imports by the end of this year. On the contrary, there are several countries (Hungary, Spain, Italy, Greece, etc.) that are against such a sanction or that would like to have a longer transition period of up to 3 years.

 UKOil – D1

The price of UKOil had a daily bullish candle that after being supported by the 21-period SMA rose from 105.40 to 110.96, breaking the downward trend of the triangle that has been forming since March on the rise and the 50-period SMA, with a target above the March highs above 140.00. In case it fails to break above the previous high at 114.00 and/or the pattern is invalidated there is support at the psychological level of 100.00 and below that the 100 period SMA.

ADX is low at 14.44, +DI 22.21 -DI 15.25, and there is no confirmed trend yet. However, on H4 it is at 34.96, confirming the uptrend.

USOil – D1

The USOil has a similar picture, with a break of the triangle to the upside with a target above 130.00 almost at 140.00, and the daily candle supported in the 50-day SMA to go from 102.90 to 108.55. The price has resistance at 110.00 and support at the psychological level of 100.00.

ADX at 13.26, +DI at 23.93 -DI at 15.36, with still no trend confirmed. However, like UKOil, on the H4 timeframe the ADX is at 37.00 confirming the uptrend since May 3 with +DI at 24.93 and -DI at 7.78.

Sources:

• https://www.bbc.com/news/world-europe-61318689


• https://www.bbc.com/news/world-europe-61318690


• https://edition.cnn.com/2022/05/04/business/eu--oil-ban/index.html


• https://www.1news.co.nz/2022/05/05/eu-takes-major-step-toward-n-oil-ban-new-sanctions/

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Aldo Zapien

Market Analyst – HF Educational Office – Mexico

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