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Brent: Oil market remains under pressure

Brent

API data on oil inventories could provide some support to oil quotes just for a while. In the beginning of the European trading session the price again pivoted to the downside.

Pressure on the price was produced by comments of Russia’s Energy Minister A.Novak that production cuts agreement within OPEC+ is temporary. He claimed that Russia will curb output only when it can benefit from it. According to September data average daily output level made 11,25 million barrels against 11,29 million barrels in August.

On this background OPEC’s Secretary General Barkindo calls for all 97 oil exporting countries to join the cooperation agreement to stabilize oil market.

Today investors will focus on inventories data from U.S. Energy Department. API reported decline in inventories by 5,9 million barrels against expectations for an increase of 1.6 million barrels. From Energy Department analysts expect the data at the level of +1,5 million barrels and correspondingly API statistics increases the probability of publishing more positive numbers from Energy Department, that might support oil market in a short term.

On the chart there are still no any reverse signals. Bulls couldn’t break resistance at the 59.40 level and the price resumed downward movement. Therefore today a prevailing option is decline of the quotes towards the 57.50 region.

Resistance levels: 59.75, 60.40, 61.40;

Support levels: 58.30, 57.50, 55.50.

Main scenario: Decline towards 57.50.

Alternative scenario: Consolidation in the 58.30-59.75 range.

Negative sentiment prevails on the market. Downward tendency continues its development on the chart. For intraday trading we give preference to short-positions from the 59.75 level.

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