Oil market has expressed surprisingly calm reaction on messages, that OPEC+ will extend production cuts agreement and USA and China will restart trade talks. And so far oil is being traded in the red mostly.
Official OPEC’s statement on extension of production cuts agreement for 9 months was announced after the close of Monday’s trading session. Many analysts say, that the mere fact of agreement extension signifies high concerns of the cartel regarding potential weakening of demand next year.
That why investors don’t hurry up to purchase oil so far despite delivering of several important news at a time, that should in theory drive to growth of the oil prices. An extra pressure on oil today was generated by the situation on stock markets, where the major indices are traded mixed pointing to decline of investors’ risk appetite.
In the coming couple of days investors will switch their attention to the data of industry statistics from the U.S. Today the data from API will be published and tomorrow U.S. Department of Energy will deliver its report. After a very solid decline in oil inventories last week analysts expect maintaining of positive dynamics and dropping of this indicator by almost 2,5 million barrels.
On the chart bears has drawn a false break of the 66.00 level, that appears to be a solid reversal signal pointing to further decline of the quotes in direction of the 63.30 level.
Resistance levels: 66.00, 67.50, 68.80;
Support levels: 63.30, 61.00, 59.50.
Main scenario: Decline towards 63.30.
Alternative scenario: Stabilizing above 65.00 and growth towards 66.00.
On the market moderately-positive sentiment preserves locally, but bearish signals prevail on the chart, therefore within intraday time-frame we consider short positions, that should be sought at the 65.00 and 66.00 levels