Fundamental analytics

WTI is preparing to update multi-month minimums

WTI

Oil continues to fall in price on Wednesday amid concerns that the further spread of coronavirus outside of China could affect global oil demand. Investors tried to assess the magnitude of the consequences of the epidemic. The number of new infections in China has decreased, but the number of cases in other countries is growing.

 

A bearish signal for the market was the recent API stock data. According to the report, the level of reserves increased by 1.2 million barrels. As part of today's report, the US Department of Energy is expected to increase reserves by 2 million barrels.

 

Another negative factor for the market is the disagreement in OPEC+ regarding the reduction of production quotas. According to media reports, Saudi Arabia wants to abandon partnership with Russia after it rejected the idea of cutting production quotas by 0.6 million barrels per day.

 

There are still no positive factors on the market, so in the near future we should expect continued downward movement.

 

The chart is dominated by bearish signals. The price has pushed the level of 50.50 and now we are witnessing a retest of the level of 49.30. Currently, we do not see any reaction from the buyers, therefore, in the course of today's trading, we expect the breakdown of this mark.

 

Resistance levels: 50.50, 52.00, 53.25.

 

Support levels: 49.30, 49.00, 48.00.

 

The main scenario - a breakdown of support at the level of 49.30 and a decline in the direction of 48.00.

 

An alternative scenario - a false breakdown of the level of 49.30 and an increase towards 50.50.

 

The fundamental outlook is moderately negative. We still give priority to shorts. We expect to find entry points at the levels of 50.50 and 52.00.