Oil prices continue to move down. Investors react to the publication of weekly API data and reports of a possible increase in oil production in Russia.
According to the API report for the week, the level of oil reserves in the country grew by 8.7 million barrels. Experts expected an increase of 1.9 million barrels. API data increases the likelihood that the data presented today from the US Department of Energy will be worse than market expectations. Experts predict a decline of 1.9 million barrels.
The market is further pressured by yesterday’s reports that Russia may increase production despite a continuing imbalance in favor of excess supply.
Another significant risk factor for the market is the possible conflict between the two largest consumers of oil in the world - US and China. Retaliatory sanctions on both sides could harm the recovery of the global economy and decrease demand for energy.
Regarding the chart, trading continues in the flat of 31.50-34.00. If the bears manage to push support at 31.50, the price can continue to move downward, in the direction of the level of 30.30 and below. At the moment, the probability of a 31.50-34.00 flat development remains more relevant.
The main scenario - growth to 34.00
An alternative scenario - a consolidation below 31.50 and a decline towards 30.30.
The current fundamental outlook is moderately negative. We consider longs with moderate risks from the level of 31.50.
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