Fundamental analytics

Japan has cut crude oil imports by more than 25%

WTI

On Tuesday oil prices fell having recouped more than half of the gain of the previous trading day. Investors remain concerned about the prospects for a recovery in energy demand amid the active spread of the second wave of COVID-19.

 

Japan's Finance Ministry data showed that crude oil imports into the country in August fell more than 25% from the same period last year. Japan is one of the largest energy consumers in the world.

 

More than 1 million people have died from COVID-19 as of Tuesday, according to Reuters. Several countries are experiencing a sharp increase in the number of deaths from infection. The further spread of the virus could lead to the introduction of new, more stringent quarantine measures, which will inevitably lead to a reduction in energy consumption.

 

Investors are closely following discussions on the new bill, which the US Democratic Party presented on Monday. The bill involves the allocation of 2.2 trillion dollars to support the economy. Investors hope that these measures will help to stabilize the situation in the US economy and a stable recovery in the level of demand for energy.

 

Today it is expected to publish data on oil reserves from the American Petroleum Institute (API). Analysts polled by Reuters expect stocks to drop by 1.4 million barrels.

Traders also followed the clashes between Armenia and Azerbaijan. Analysts believe that in the event of an escalation of the conflict, oil and gas supplies from Azerbaijan could be significantly disrupted.

 

The price is already very weakly reacting to the level of 40.50. Yesterday buyers were able to overcome this level quite easily, therefore, we consider the scenario with the further development of the upward movement towards the level of 41.40 as a priority.

 

· Resistance levels: 40.70, 41.40, 42.10.

 

· Support levels: 39.15, 38.60, 37.30.

 

The main scenario - growth in the direction of 41.40.

 

An alternative scenario - consolidation in the range of 39.15-40.50.

 

The current fundamental outlook is neutral. We consider longs near the level of 39.30.

 

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