Fundamental analytics

Brent: Oil market got some support from API data

Brent

Oil market continues to grow despite significant drop of investors’ interest in dicey assets. Locally support to the quotes was provided by data of industry statistics from the U.S.. According to information delivered by API oil inventories in the U.S. has decreased by 7,5 million barrels for the reporting week, that rises investors’ optimism substantially before release of the main data form the U.S. Department of Energy.  Analysts forecast decline in inventories by 2,5 million barrels, but after data from API many investors expect a bigger drop of this indicator. This data can signify a recovery of internal demand in energy carriers. Tensed situation around Iran also supports high oil demand. Today Tehran officials claimed, that they are not going to comply with restrictions on production of low-enriched uranium anymore. Moreover the country’s authority claimed, that if global community doesn’t take steps to protect Iranian economy from U.S. sanctions, the country will resume enriching uranium to a higher level. Investors are concerned about escalation of the conflict between USA and Iran and new clashes in the Straight of Hormuz, that may cause damage to timely oil supply from the Middle East region. Today we follow the report of the U.S. Energy Department.

On the chart a corrective wave continues to develop from the earlier mentioned support at 63.30 still having the main target at the 66.00 level. Therefore we expect further development of bullish wave in the coming days.

Resistance levels: 66.00, 68.80, 72.50;

Support levels: 63.30, 61.00, 59.50.

Main scenario: Growth towards 66.00.

Alternative scenario: Stabilizing below 63.30 and correction towards 61.00.

Overall market sentiment is still positive. Bullish signals prevail on the chart. Within intraday time-frame we consider long-trades at the 64.30 and 63.30 levels