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Oil prices remain under pressure despite a decline in US oil reserves

Oil prices remain under pressure, despite the positive statistics from the United States. According to the report of the US Department of Energy for the reporting week, oil reserves in the country decreased by 0.75 million barrels. Experts expected an increase of 4.15 million barrels.

 

The investors' mood was spoiled by disappointing forecasts of the EIA, OPEC and the US Federal Reserve. The EIA has revised its expectations regarding the dynamics of energy demand. According to the new forecast, in 2020 oil demand will fall by 8.1 million barrels per day, to 92.6 million barrels per day. The previous forecast suggested a decrease in demand of 5.2 million barrels per day.

 

OPEC has also revised its expectations for the worse regarding the dynamics of energy demand. Demand is expected to fall by 9.07 million barrels per day, against the forecast of the previous month at -6.85 million barrels.

 

The gloomy prospects of the US economic recovery did not please investors either. According to Jerome Powell, this will take much more time than previously expected. Obviously, under these conditions, oil demand will also grow very slowly.

 

Against this background, investors ignored OPEC +’s statements about a possible extension of the agreement to limit oil production. A new OPEC + meeting is expected to take place in June.

 

Regarding the chart, the flat continues to develop. Most likely, the market situation will not change in the coming days. Bidding will take place in the range of 23.90-26.90.

 

  • Resistance levels: 26.90, 30.30, 33.75.

 

  • Support levels: 23.90, 21.50, 19.50.

 

The main scenario - flat development in the range of 23.90-26.90.

 

An alternative scenario - a breakdown at the level of 26.90 and an increase towards 30.30.

 

The current fundamental outlook is moderately negative. We suggest trading from the borders of the flat 23.90-26.90 channel.

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