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Oil prices decline despite the situation in the Middle East

Oil prices are in decline despite reports of energy production problems in Iraq and Libya. On Tuesday, WTI decreased by 0.8%, Brent decreased by 1.0%.

 

Due to the anti-government protests in Iraq, production at the Al-Ahdab field (a capacity of 70,000 barrels/day) was completely suspended over the weekend.

 

In Libya, production was halted at the two largest fields after forces of General Khalifa Haftar supported by the Russian military blocked the main pipeline.

 

Despite the production decline in Iraq and Libya, the oil surplus remains on the market, therefore, after the initial speculative reaction of the market, oil prices began to fall. Due to the volume of available reserves, the oil flow is carried out as planned and short-term production interruptions practically did not affect the overall volume.

 

In the next few days, in addition to the situation in the Middle East, industry statistics from the USA will have a significant impact on the course of trading.

 

Regarding the chart, the price is approaching a fairly strong support level of 57.60. Therefore, in the middle of the trading day, we expect to witness reversal signals and the development of a moderate upward movement towards the level of 59.00.

 

  • Resistance levels: 59.00 60.00, 62.50;

 

  • Support levels: 57.60, 56.70, 55.05.

 

The main scenario - an increase towards 59.00.

 

An alternative scenario - a consolidation below the level of 57.60 and a decline towards 56.70.

 

The fundamental outlook is moderately positive. The price has approached a strong support level, therefore, for a short time period we are currently considering longs from the level of 57.60.

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