Oil prices continue to move upward, reacting to the publication of positive weekly data from the US Department of Energy. Apparently, large-scale production cuts in OPEC + and the USA provide positive effects.
During the reporting week, the level of oil reserves decreased by 4.93 million barrels. Experts expected an increase of 1.15 million barrels.
Constraining influence on the market is still provided by fears associated with a weak recovery in energy demand. The United States, the world's largest oil consumer, continues to experience serious problems with the distribution of COVID-19 and its associated social and economic constraints. India, the third largest oil buyer in the world, has extended strict quarantine measures until May 31 to prevent the further spread of COVID-19.
Experts note that the latest data indicate that the fall in inventories is primarily due to a significant decrease in supply than growth in demand for energy. Therefore, further growth in oil prices will be limited.
Regarding the chart, bullish signals are locally dominant. Today, for the first time since March 13, the price tested the 34.00 mark. If the bulls manage to gain a foothold above this level, the upward movement can continue.
· Resistance levels: 34.00, 35.70, 36.50.
· Support levels: 32.70, 31.30, 30.30.
The main scenario - a decline towards 32.70.
An alternative scenario - a consolidation above 34.00 and growth towards 35.70.
The current fundamental outlook remains neutral. There are no good entry signals on the market. We recommend refraining from trading the instrument.
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