Fundamental analytics

Brent fell by 6%, WTI by 3.7%

S&P500

On Monday, the oil market opened with a strong downward gap. At the time of writing, Brent is trading at -6.0%, WTI is down by 3.7%.

 

The decline in oil prices is due to a significant drop in energy demand and active price dumping between the largest oil producers. At the same time, bidders almost ignored the promise of Donald Trump to fill strategic petroleum reserves (SPR). Experts note that these measures will not be enough to stabilize the market situation. Currently, the US SPR is 634 million barrels at a maximum load of 714 million barrels. The difference is only 80 million barrels. With a planned procurement volume of 4 million barrels per day, within 20 days the United States will fill its strategic reserves. At the same time, the impact of coronavirus on the global economy and the oil market may drag on for months.

 

The chart is dominated by bearish signals. Sellers increase the pressure to the level of 30.30, increasing the likelihood of a breakdown. In this case, the next target for price movement may be the level of 27.00.

 

· Resistance levels: 31.50, 33.75, 35.70.

 

· Support levels: 30.30, 27.00, 26.00.

 

The main scenario - a breakdown of support at the level of 30.30 and a decline towards 27.00.

 

An alternative scenario - a breakdown of intraday resistance at the level of 31.50 and an increase towards 33.75.

 

The fundamental outlook is negative. We consider shorts from the level of 31.50.

 

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