Fundamental analytics

Oil expects OPEC report and industry statistics from the US.


Oil closed yesterday’s session in the red on the back of changes of forecasts from EIA and comments of Russian President regarding oil output level in the second part of 2019.

US Energy Information Administration (EIA) has published a report yesterday, where it increased the forecast on average daily oil output level in the US in 2019 from 12,3 million bpd to 12,4 million bpd. At the same time production in March was 12,1 million bpd on average, that is higher than February level of 11,9 million bpd. Also in EIA confirmed decline in global oil inventories by 0,7 million barrels in March and by 0,5 million barrels in the first quarter of 2019. It’s the first quarterly decline since end-2107.

Yesterday Russian Energy Minister Alexander Novak and Russian President Vladimir Putin has put in doubt the necessity of further extension of the Vienna agreement.

In particular Novak claimed, that according to forecasts oil market will stay in balance in the second half of the year, that makes unnecessary extension of output restrictions. At the same time he noted, that final decision on this matter is to be taken in June. Vladimir Putin mentioned, that Russia is ready for further cooperation and discussion of issues within OPEC+, but can’t guarantee further restraining of production level, since Russian companies have their own plans and want to follow them. Today oil tries to regain some losses due to situation on stock markets, where the main global indices are being traded in the green reflecting incline of investors to risk. Support is also provided by the news from Libya, where armed clashes continue, that may lead to serious disruptions in crude supply. Later investors expect publishing of OPEC monthly report and weekly data from the US Department of Energy.

On the chart bullish trend is still in place. Having renewed weekly lows, bulls got new fuel for continuation of upward advance with the most likely target at the 72.00 level. Correspondingly we should give preference to long-trades of the asset intraday, that should be sought at the 70.60 level.

Resistance levels: 71.20, 72.00, 74.00;

Support levels: 70.60, 70.00, 68.80.

Main scenario: Growth towards 72.00.

Alternative scenario: Break of support at 70.60 and decline towards 70.00.

Globally a bullish trend preserves on the market, therefore intraday we should consider long-trades seeking them at the 70.60 level.

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