Oil market on Wednesday is being traded in the green on the back of API data release showing decline in oil inventories for the week by more than 10 million barrels. It’s the biggest drop since September 2019 according to API statistics. Correspondingly now investors expect publishing of this type report from the U.S. Department of Energy. The U.S. government’s official figures are due Wednesday morning. Analysts predicted drop of the indicator by a bit more than 4 million barrels. After exhibition of API report there is a high probability to see a more positive data.
One more support factor for the market is news on resumption of full-scope trade talks between USA and China. In the White House they called it a good sign that top U.S. officials would be travelling to China to discuss resumption of stalled trade talks. Investors hope for clinching a deal in the near future, that will facilitate development of the situation in global economy creating higher energy demand.
Investors also keep following the situation in the Strait of Hormuz. There are still risks of new conflict outburst, therefore energy demand is trending up.
On the chart the price resumed upward movement and now tries to gain a foothold above the 63.50 level. It’s a good bullish signal, that makes more likely for execution scenario with growth of the quotes in direction of the 64.60 and 66.60 level.
Resistance levels: 64.60, 66.60, 67.30;
Support levels: 62.60, 61.00, 59.50.
Main scenario: Growth towards 64.60.
Alternative scenario: Break of support at 62.60 and decline towards 61.00.
Positive sentiment is formed on the market. Bullish signals prevail on the chart. For intraday trading we consider long-trades from the 62.60 level.