Fundamental analytics

Brent: Oil rises on expectations of U.S. inventories draw down


Oil market has closed Tuesday’s session with slight decline reacting on unexpected resignation of U.S. President national security adviser John Bolton.

Bolton was the chief architect of Mr Trump's hard-line stance on Iran and Venezuela. And his dismissal may signify that USA might ease sanctions against those countries. Now investors await for the news on who is going to replace John Bolton taking the office of President’s national security adviser.

Today market has regained some earlier losses reacting on a very positive data from API on oil inventories dynamics. According to the report crude stocks dropped by 7,2 million barrels in the latest week. Whereas OPEC member Iraq said the group will discuss whether to deepen output cuts. Today U.S. Energy Department will release its report. They expect decline in inventories by 2,7 million barrels. API data significantly increases the likelihood of U.S. Energy Department data being more positive, that may locally provide tangible support to oil prices.

Today release of OPEC’s monthly report is also expected.

On the chart the main trading still goes at the area of 62.30 level. Gaining a foothold above this mark will provide buyers with very good conditions for further development of upward movement in direction of the 64.70 and 66.60 levels.

Resistance levels: 62.60, 64.70, 66.60;

Support levels: 61.80, 59.30, 57.50.

Main scenario: Stabilizing above 62.30 and growth towards 64.70.

Alternative scenario: Break of support at 61.80 and decline towards 59.30.

Moderately-positive fundamental background is maintained on the market. Bullish signals prevail on the chart locally. In short-term we give preference to long-positions from the 61.80 level.

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