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Oil prices continue to decline. Onshore oil storage facilities are 85% full.

On Tuesday oil prices continue to move down amid concerns regarding oversupply and reduction of available oil storage reserves.

 

According to the consulting company Kpler, due to the excess supply of oil storage facilities on land, they are 85% full. Companies are forced to hire expensive vessels to store excess raw materials, nonetheless the available reserves are gradually decreasing, and the cost of storage is increasing.

 

Starting May 1, OPEC + countries will reduce supply by almost 10 million barrels, but this will not be enough to compensate for the decline in demand, which has fallen by about 30 million barrels. Many experts note that even in the case of relaxation of restrictive measures and the resumption of normal economic and social activities, energy demand will recover very slowly.

 

Analysts note that for fear of another collapse in prices to negative values, many investors sell June oil futures and buy contracts with a later maturity. Most likely, the oil market will remain under pressure for a rather long period of time.

 

The economic calendar today will focus on crude oil inventories from the American Petroleum Institute (API).

 

Having fixed below the level of 15.00, the price continued to move down. The closest significant support level is at 11.50. The priority is the scenario with a decline in quotes.

 

  • Resistance levels: 15.00, 17.00, 19.00.

 

  • Support levels: 11.50, 10.00, 8.50.

 

The main scenario - a decline towards the level of 11.50.

 

An alternative scenario - a return to the level of 15.00 and growth towards 17.00.

 

The current fundamental outlook is negative. Shorts remain a priority. Entry points are to be sought after at the level of 15.00.

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