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Oil prices remain under strong pressure

Oil prices are gradually recovering after falling by more than 20% at Wednesday's trading.

 

The decline was due to reports about all world oil storage facilities being filled in 3-4 months and the global oversupply of oil. According to information sources, the Egyptian Sumed oil storage system is fully contracted. Vaults in China are 2/3 full. With a further increase in production from Saudi Arabia and other large oil producers, storage reserves will be exhausted in the first half of the year. Experts do not exclude that in the case of maximum storage capacity, the cost of oil may drop to $ 10 per barrel.

 

Locally, oil quotes are supported by news about large-scale stimulus measures by the world Central Banks, but, obviously, in the current situation, the possibilities for restoring “black gold” will be limited. The price war between major oil producers continues, while Morgan Stanley and Goldman Sachs have already announced the start of a global recession.

 

Regarding the chart, bearish signals still prevail. Within the day, we can expect the completion of the correctional movement at the levels of 24.30 and 25.75. The medium-term goal for the bears is the psychologically important level of 20.00.

 

  • Resistance levels: 24.30, 25.75, 27.20.

 

  • Support levels: 21.85, 20.35, 20.00.

 

The main scenario - a breakdown of support at the level of 51.85 and a decline by 20.00.

 

An alternative scenario - consolidation above the level of 24.30 and growth towards 27.20.

 

The fundamental outlook is negative. We consider shorts from the levels of 24.30 and 27.20.

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