The oil price is recovering on Tuesday amid the positive dynamics of stock indices.
On Monday, Brent and WTI fell to 18-year lows amid growing fears of lower energy demand and increased supply. From April 1, Saudi Arabia, Russia and other oil producers may pursue an independent policy on oil production, as the Vienna Agreement, which restricts production volumes, ceases to be valid.
A conversation between U.S. President Donald Trump and his Russian counterpart Vladimir Putin on Monday, which discussed the importance of stability in energy markets, did now produce significant results. Therefore, despite the local recovery in quotes, the oil market remains under very strong pressure. After a small correction, we may again see a wave of sell-offs and the renewal of multi-year lows.
On the chart, a correction wave from the level of 21.30 is developing. The bulls have tested the resistance at 23.20 and now continue to increase the upward pressure on this level. Today, we are waiting for the break-down of this level and the development of a moderate upward movement towards the level of 25.75.
Resistance levels: 23.20, 25.75, 27.50.
Support levels: 21.30, 20.35, 19.75
The main scenario is a break-down of the resistance at 23.20 and rise in the direction of 25.75.
Alternative scenario is a decrease to 21.30.
The fundamental background is neutral. The bullish signals locally prevail on the chart, so we consider the intraday instrument buying from the level of 22.70.