Crude oil is trading in a narrow range on Wednesday, but is mostly held in the green zone. The price is positively influenced by the optimistic sentiments of investors on stock exchanges and improved forecasts for the rate of recovery in energy demand in the current year.
On Tuesday, the US Department of Energy raised its forecast for energy demand. Oil demand is expected to rise by 0.18 million barrels per day this year, up to 5.5 million barrels. At the same time, the level of oil production in the United States by the end of 2021 will decrease by 0.27 million barrels up to 11.04 million barrels. The forecast for oil demand in 2022 has been reduced by 0.18 million barrels to 3.65 million barrels.
The market was also supported by the new forecasts of the IMF. IMF experts expect that the GDP of the world economy in 2021 will grow by 6.0%. In January, experts estimated the prospects for GDP growth at 5.5%. Investors hope that energy consumption will rise along with the global economic recovery.
The API report released late last night showed that the level of oil reserves in the country fell by 2.6 million barrels over the week. In the framework of the later published EIA report, experts expect a decrease in the level of reserves not 1.436 million barrels.
In negative news for the oil market, reports that Iran agreed to form working groups to discuss a possible renewal of the 2015 nuclear deal. In the long term, this may lead to the lifting of US sanctions against Iran's energy sector, which, in turn, will lead to an increase in global energy supplies.
On the chart, the price is holding within the boundaries of the horizontal channel 59.00-61.85. Now the bears are trying to push through the lower border of the side. If they succeed, we will see the sideways expansion to the levels of 57.20-61.85.
· Resistance levels: 60.40, 61.85, 63.40.
· Support levels: 59.00, 57.20, 55.35.
The main scenario is a breakdown of support at 59.00 and a decline to 57.20.
An alternative scenario is growth from current levels.
The current fundamental background is neutral. We consider shorts with very moderate risks from the level of 59.90.