Fundamental analytics

Brent: Oil market retains good potential for recovery


On Monday oil marker was traded with moderate decline on the back of pressure, that was produced by the situation on stock markets. Major stock indices were traded in the red pointing to low interest of investors in dicey assets, that puts serious pressure on crude oil.

Market got some support from tensed situation around Iranian issue. Tehran and Washington again has exchanged with sharp remarks. Trump has said he’s willing to talk with Iran while at the same time imposing a campaign of “maximum pressure” on the opponent. Investors are concerned about escalation of the conflict, that may drive to disruptions in crude oil supply from the Middle East. 

Later this week several consecutive important industry reports are to be published, that may produce tangible influence on market movement dynamics. Today U.S. Department of Energy will publish report on short-term prospects of energy market, on Thursday OPEC will release its monthly report and on Friday International Energy Agency will deliver its monthly report. Besides this traders will closely follow weekly industry data from the U.S. API report will be published today and U.S. Energy Department data will be released on Wednesday.

On the chart despite local decline due to the retest of resistance at 64.70, market retains good potential for development of bullish movement with the main target at the 66.00 level.

Resistance levels: 65.00, 66.00, 68.80;

Support levels: 63.50, 62.50, 61.00.

Main scenario: Growth towards 65.00.

Alternative scenario: Break of support at 63.50 and decline towards 62.50.

Market sentiment can be described as neutral now, but on the chart bullish signals prevail, therefore within intraday time-frame we give preference to long-trades of the asset from the 63.50 level.

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