Today crude oil is being traded in the green regaining the losses suffered during yesterday’s session, when WTI quotes dropped by more than 1,5% and Brent quotes were down by 1,1%.
We can mark several sound factors in bulk, that triggered sell-offs on oil market yesterday. First of all, investors were very negative about claims of International Energy Agency (IEA), that contained concerns regarding slowdown in global crude demand due to continuing trade wars and global economic slowdown. Secondly, negative impact on the crude was imposed by situation on stock markets, where the interest for risky assets was weak. The third factor that weighed on the whole commodity sector was american dollar, that showed tangible strengthening during yesterday’s session getting support from the US economic data. Today the situation on the market is completely different. Firstly, strong support to the quotes is provided by situation on stock markets, where the main global indices are being traded in the green reflecting incline of investors to take risks. Secondly, after quite a steady growth the day before, on Friday US dollar lost almost all conquered positions and today it’s being traded with decline of 0,3% making commodities cheaper for investors, who keep capital in other currencies. The third factor of support is overall situation on oil market, where supply level and stockpiles continue to be curbed, that facilitates growth of the asset’s price in accordance with the laws of the market.
In the news feed we should pay attention to publishing of the weekly Baker Hughes report on drilling activity.
On the chart a bullish trend retains. Yesterday buyers managed to guard the local support 70.50, from where a new bullish wave was launched. The first target of the movement is 72.00 level and given the current pace of recovery, we can expect the price at this level even today.
Resistance levels: 71.60, 72.00, 74.00;
Support levels: 70.50, 70.00, 68.80.
Main scenario: Growth towards 72.00.
Alternative scenario: Sideways channel within 70.50-51.60.
On the market positive sentiment preserves in general, therefore intraday we ought to give preference to long-trades of the asset seeking them at the 70.50 level.