Fundamental analytics

Brent: Oil market opens new trading week in the red


Oil market opens Monday's trading session in the red. Brent crude was down 55 cents, or 0.9%, at $61.96. The contract rose 1.3% last week. WTI was 47 cents, or 0.8%, lower at $56.77 a barrel, having risen 1.9% last week. Investors took negatively Donald Trump's comments that USA and China so far didn't reach an agreement to lift earlier imposed tariffs within interim trade deal. He said on Saturday that trade talks with China were moving along “very nicely,” but the United States would only make a deal with Beijing if it was the right one for America.

Claims of Iranian president Hassan Rouhani about discovering of a huge oilfield in Iran could impose some extra pressure on the market. Market is still imbalanced having oversupply, therefore further growth of production may drive to making situation worse. Though exporting capability of Iran remains limited for the account of american sanctions.

Today Oman's minister of oil and gas Mohammed bin Hamad Al Rumhi claimed, that OPEC+ countries most likely will extend production cut agreement till the end of March 202 and hardly will agree for bigger curbs of the quotas.

On the chart we can distinguish horizontal range 60.00-62.50. Now the price resides in the middle of this range and has virtually equal probability of going either upwards or downwards.

Resistance levels: 62.50, 64.00, 65.00;

Support levels: 60.00, 59.00, 57.00.

Main scenario: Decline towards 60.00.

Alternative scenario: Growth towards 62.50.

Negative bias prevails on the market locally. For intraday trading we give preference to going short during pullback of the price to the 62.50 region.



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