Oil prices continue to decline. Since the beginning of the day, the price of Brent has declined by 13.5% whereas WTI lost 8.5%.
Quotations decrease occurs due to the excess of supply amid a sharp drop in energy demand. Agreements by OPEC + countries to reduce production should come into force only in May, while the market requires urgent action. At the same time, the OPEC agreement provides for a decrease in production of only 9.7 million barrels a day. Experts estimate a decline in global demand at 30 million barrels a day. It will be extremely difficult for OPEC + countries to agree on such a massive reduction in production.
There is less and less time to make a decision. The world's largest oil storage facilities are almost full. US manufacturers are starting to store oil and fuel in railroad cars and unused pipelines. Storage costs are rising. In fact, the cheapest place to store oil now is land. The largest oil producing countries should significantly reduce production. Until this happens, the oil market will remain under strong pressure.
Today, investors will follow the publication of new data from the US Department of Energy on stocks.
Regarding the chart, yesterday there was a breakthrough of support at the level of 20.35. Bidding has moved into a new medium-term trading range, with borders at the levels of 10.00-20.00. Locally, on the chart there are visible prerequisites for the development of a correctional movement, but correctional growth is currently limited by the levels of 15.00 and 17.50.
The main scenario - an increase towards 15.00 and further downward movement.
An alternative scenario - a breakdown of resistance at the level of 15.00 and an increase towards 17.50.
The current fundamental outlook is negative. We still prioritize shorts. Entry points are to be sought after at the levels of 15.00 and 17.50.
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