Yesterday oil market continued downward movement on the back of aggravating situation in international trading and release of weekly report by U.S. Department of Energy. Brent and WTI underwent drop by more than 3%.
According to report of U.S. Energy Department oil inventories in the latest week showed unexpected growth by 2,4 million barrels and petroleum inventories rose by 4,4 million barrels while analysts predicted another drawdown of both indicators. It’s the first rise in oil inventories after seven weeks of consecutive crude drawdowns. Besides, growth took place despite substantial increase of refineries’ workload - to its highest in the current year. But significant growth of imports drove to oversupply on the market.
Market was able to regain positions partially when the trading session was running out after messages reporting that Saudi Arabia considers any options to prevent oil prices from further falling. But today market again resumed movement to the downside and can continue decline on the back of prevailing negative sentiment.
Bearish trend is in progress on the chart. During corrective movement the price faced a solid resistance at the 57.65 level and we can expect resumption of downward movement from this level.
Resistance levels: 57,65, 58,75, 62.30;
Support levels: 55.55, 55.00, 54.00.
Main scenario: Decline towards 55.55 from current levels.
Alternative scenario: Break of resistance at 57.65 and growth towards 58.75.
Negative fundamental background retains on the market, therefore we give preference to short-positions seeking them at the 57.65 and 58.75 levels