Fundamental analytics

Oil quotes are down by more than 2%

WTI

Oil prices are down by more than 2% on Wednesday after the publication of data from API on reserves of raw materials.

 

According to the industry group American Petroleum Institute, during the reporting week, oil reserves in the United States rose by 4.6 million barrels to 495.2 million barrels. Analysts polled by Reuters had expected a more modest increase of 1.2 million barrels. Rising US oil inventories and worsening epidemiological conditions in the US and Europe have heightened concerns about an oversupply of oil in the market and a decrease in demand for fuel.

 

The negative news for the market was the statements of the US President Donald Trump that the package of new stimulus measures will not be adopted until the presidential elections, as the disagreements between Republicans and Democrats over the scope of the program are still very significant.

 

Meanwhile, oil companies operating in the Gulf of Mexico were again forced to mothball some of their drilling rigs due to the approach of the 11th hurricane this year.

 

Today, all investors' attention will be directed to the EIA's weekly energy stocks report. Experts predicted an increase in oil reserves by 1.23 million barrels.

 

The chart is dominated by bearish signals. The price bounced down very strongly from the resistance at 39.90. Today we expect a breakdown of support at 38.65 and a medium-term decline in quotations to 37.00.

 

· Resistance levels: 39.90, 40.65, 41.60.

 

· Support levels: 39.65, 37.00, 36.60.

 

The main scenario - a breakdown of support at 38.65 and a fall to 37.00.

 

Alternative scenario - a consolidation in the range of 38.65-39.90

 

The current fundamental outlook is moderately negative. We consider shorts from the levels of 39.05 and 39.55

 

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