Fundamental analytics

Brent: Oil quotes has switched to decline on release of the data from API.

Brent

Oil market has commenced Wednesday’s trading session with a tangible decline. As we type this report Brent crude grade is being traded -1,6% and WTI -1,8%. The pressure on the price was produced by the data on oil inventories from API and situation on stock markets.

Weekly API report has indicated a growth in oil inventories by 4,85 million barrels, that makes investors to revise their forecasts regarding the release of U.S. Energy Department report where analysts expect to see a decline of inventories by 0,48 million barrels. Most likely the actual figures will be worse than market expectations, that can increase pressure on oil market.

One more factor that puts pressure on oil prices is the situation on equity marketplaces, where the major indices are being traded in the red, reflecting low interest of investors for dicey assets including crude oil.

A day before the U.S. Department of Energy has published a monthly report with lower forecast on oil demand and higher forecast on production in the U.S., that also reduces investors’ optimism regarding further prospects of oil market development.

Positive factor for investors might be only the news on upcoming meeting of OPEC+ countries, where the production curbs agreement is highly likely to be extended. According to claims of the UAE Energy Minister Al Mazroui the countries are very close to reaching a consensus regarding extension of agreement at least till the end of this year. Let’s remind, that the meeting is going to take place on the 25-26th of June.

Today’s main event should be the report of U.S. Department of Energy, that is to be published at 14:30 GMT.

On the chart the price has pierced support at 61.40 after a long-lasting intraday consolidation. It’s a local bearish signal, that makes the next target for price movement the 60.00 level.

Resistance levels: 61.10, 62.10, 63.20;

Support levels: 60.00, 58.50, 58.00.

Main scenario: Decline towards 60.00.

Alternative scenario: Stabilizing above 61.10 and recovery towards 62.10.

Negative sentiment prevails locally on the market, that facilitates a development of bearish wave. Therefore within intraday time-frame we consider short-trades of the asset, that can be sought at the 61.10 and 62.10 levels.

 

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