Fundamental analytics

Brent: Oil prices rise after release of API data


Oil market has closed yesterday’s session with growth. Positive impact on the price was produced by claims of OPEC’s secretary general Mohammed Barkindo who noted, that the cartel may revise forecasts on growth of oil demand setting it higher amid slight improvements in the global economy growth outlook.

Today the main driver of the quotes’ growth during Asian session was API data on crude inventories. According to the report stockpiles fell by 0,5 million barrels. This data somewhat increase investors’ optimism before release of the major report by Energy Information Administration which is expected to show growth of crude stocks by 1,6 million barrels. However, prices were capped by mixed signs for oil demand in People's Republic of China as industrial output increased in October at a less-than-expected rate but oil refinery throughput last month rose 9.2% from a year earlier to the second-highest ever.

Restraining factor for the market is high uncertainty over the prospects of US-Sino trade talks developments. A day before the Wall Street Journal reported, that negotiation process was slowed down due to contradictions regarding purchasing of agricultural products from the U.S. 

On the chart sideways channel 60.00-62.50 is still on the cards. main scenario for today implies further development of consolidation in this range. Within alternative option we might expect a break of resistance at 62.50 and growth of the quotes towards 64.00.

Resistance levels:  62.50, 64.00, 65.00;

Support levels: 60.00, 58.50, 57.00.

Main scenario: Retest of resistance at 62.50 and decline towards 60.00.

Alternative scenario: Break of resistance at 62.50 and growth in direction 64.00.

Fundamental background can be described as neutral. On the chart sideways channel 60.00-62.50 is in progress. We consider short-positions at the 62.50 level.


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