Oil market opens new trading week in the green zone (Brent was at $63.66, up 27 cents or 0.43%, the benchmark having also finished little changed last week, WTI crude rose 18 cents, or 0.31% to $57.95 a barrel having ended last week little changed after tracking ups and downs in the trade talks process) amid improving sentiment on stock markets and news on extension of production cuts agreement by OPEC+.
Today positive sentiment prevails on stock markets amid claims by the U.S. over on-going opportunity of signing interim trade agreement in 2019. Monday’s higher opening prices came after U.S. national security adviser Robert O’Brien claimed on Saturday that an initial trade deal with China is still possible by the end of this year. Crude oil is related to dicey assets, therefore growth of the major stock indices as a rule produces positive impact on oil quotes.
Positive impact on oil market is created by messages reporting that research by CME OPEC Watch Tool showed that a probability of OPEC+ production cuts agreement makes about 81,5%. Probability of lowering production quotas makes about 8,2%. Probability of increasing output quotas is estimated as 10,3%.
On the chart we note an attempt of buyers to gain a foothold above the 62.50 level. In case of success we might expect further development of upward movement in direction of the 64.00 level.
Resistance levels: 62.90, 64.00, 65.00;
Support levels: 62.00, 61.15, 60.00.
Main scenario: Stabilizing above 62.50 and growth towards 64.00.
Alternative scenario: Break of support at 62.00 and decline towards 61.15.
Market sentiment is moderately-positive. Bullish signals prevail on the chart. We consider longs from the 62.00 level.