Fundamental analytics

Brent: Oil market is under pressure amid decline of the major global stock indices

Brent

Oil market is being traded down today. Brent is down 0,9%, WTI is down 0,6%. The main factor that weighs on the price is situation on stock markets. The major indices of Asia and Europe are being traded in the red reflecting drop of demand for dicey assets including oil. Investors took negatively Donald Trump’s claims addressing China and threats to raise tariffs in case trade deal between two countries is not signed. Such position may aggravate further negotiations producing worsening of global economic situation in future and lowering global demand for energy.

U.S. President Donald Trump said on Wednesday that the two states were close to finalizing a trade deal, but he fell short of providing a date or venue for the signing ceremony, upsetting investors.

Besides geopolitical news in the coming days investors will closely follow publishing of industry data from the U.S. Analysts again predict growth of oil inventories in USA, that may increase pressure on oil market. Energy Information Administration report will be released on Thursday.

On the chart price faced resistance nearby the upper boundary of horizontal channel 60.00-62.50. Now we observe forming of bearish wave from the upper boundary of the sideways channel towards lower one. In case of break of 60.00 level the next target might be the 58.50 mark.

Resistance levels:  62.50, 64.00, 65.00;

Support levels: 60.00, 58.50, 57.00.

Main scenario: Decline towards 60.00 and break of this mark.

Alternative scenario: Consolidation in the middle of 60.00-62.50 range.

Negative sentiment prevails on the market. Bearish signals dominate on the chart. We consider short-trades from the 62.00 level.

 

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