Fundamental analytics

Brent: Oil quotes grow before release of Energy Information Administration data


Oil quotes continue moderate upward movement. The main support factor for the market is still situation on stock markets, where major indices are being traded in the green. Investors keep moderate optimism regarding U.S.-China trade talks and hope, that the sides will be able to sign interim agreement till the end of the year. Optimism on global trade, along with market expectations for an extension in supply curtailments by the Organization of the Petroleum Exporting Countries and associates, have supported oil prices.
A restraining factor for the market is industry data from the United States. According to API report country’s crude stockpiles in the week rose by 3,6 million barrels. Later on Wednesday the U.S. Energy Information Administration (EIA) is due to publish official oil stocks data.  Within Energy Information Administration report a drop of inventories by 0,4 million barrels is anticipated.  API data implies, that actual report by EIA might be worse than market expectations, that may lead to decline of the oil price.

We also need to take into consideration, that tomorrow is a day-off in the U.S. Many investors will cover positions before long weekend on american market.

On the chart price retains upward movement vector. Bulls managed to gain a foothold above the 62.50 mark and next target for price action is 64.00 level, where we can expect a forming of retracing movement.

Resistance levels: 62.90, 64.00, 65.00;

Support levels: 62.00, 61.15, 60.00.

Main scenario: Growth towards 64.00 and downward reversal.

Alternative scenario: Stabilizing above 64.00 and growth in direction 65.00.

Market sentiment is moderately-negative. Bullish signals prevail on the chart. We consider long-positions with moderate risks from the 62.50 level.

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