Fundamental analytics

Brent: Oil market is striving to recover



The natural gas price continues to go down rewriting the lows established three years ago. Just by the end of previous day the price tumbled by more than 2% and for the month decline exceeds more than 6,5%. Slide of the gas quotes goes on the back of curtailment of demand in this asset on background of favorable weather conditions in the U.S. In this view the data on gas inventories dynamics in the U.S., that should be released today, will be very important for further trading. Analysts forecast growth of inventories by 111B. Correspondingly the stronger growth can increase pressure on the natural gas price and vice versa.

On the chart the price bounced to the downside from the earlier denoted resistance level 2.410. Now the halt of the movement took place at the 2.365 level, from where we can expect development of corrective movement in direction of the 2.410 level. And from this region downward movement can be resumed. We might reckon on development of more substantial corrective growth of the price only after stabilizing above 2.410.

Our recommendations: Short-trades from 2.410.


Oil market is trying to recover after another wave of sell-offs, that was triggered by the data of industry statistics from the U.S. Department of Energy. According to delivered information for reporting week oil inventories in USA rose by 6,8 million barrels against expected curtailment of the indicator by 0,8 million barrels. Many analysts consider a steady trend for growth of oil inventories in the U.S. as a signal of probable slowdown in crude oil demand.

One more risk factor for oil market is a complicated situation in international trading. A day before officials in IMF has warned, that further escalation of trade dispute between USA and China can put down world’s GDP by 0,5%. Correspondingly global oil demand will go down as well increasing pressure on oil prices. Today Donald Trump claimed, that tariffs on Chinese import can be hiked by total worth of $300 billion if parties don’t reach an agreement after all.

On this background oil market will stay under solid pressure having very limited capabilities for recovery.

On the chart the price tried to pierce the support at 60.00, but this attempt failed and we have a good signal for forming of corrective movement at least in direction of the 61.80 level and perhaps higher. But global trend remains to be bearish at the same time.

Our recommendations: Short-term long-trades from 60.00.  


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