Fundamental analytics

Brent: Oil market remains under pressure


Oil market plunged yesterday along with stock markets and other dicey assets after publishing of weak economic data from USA and Germany, which enhanced concerns about prospects of global economy development. Investors also were negative about inversion of american government bonds yield curve, that may point toward a recession of the U.S. economy in future. Analysts say, that situation with global oil demand will continue to get worse.

One more factor that weighs in on the market was weekly report of U.S. Department of Energy, that showed growth of oil inventories by 1,6 million barrels versus analysts’ forecast of - 2,8 million barrels. Now inventory level is by 3% higher than average five-year reading for this period of the year, that points to presence of supply overhang on the market.

Today market attempts to regain positions that were lost yesterday by account of positive dynamics of stock market movement.

On the chart, despite yesterday’s decline, market retains good chances for continuation of growth as buyers managed to keep the price above support at 57.65. Therefore we should expect resumption of upward movement to yesterday’s highs from current levels.

Resistance levels:  59.10, 60.70, 62.30;

Support levels:  57.65, 55.55, 55.00.

Main scenario: Break of resistance at 59.10 and growth towards 60.70.

Alternative scenario: Break of support at 57.65 and decline towards 55.55.

On the chart negative fundamental sentiment prevails locally, but there are premises for resumption of upward movement. Therefore for intraday trading we give preference to long-trades for this asset from the 58.00 level.


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