Oil prices are growing despite significant increases in US oil reserves.
On Wednesday, the US Energy Information Administration (EIA) announced an increase in crude oil reserves of 4.892 million barrels, despite the forecast of -2.088 million barrels. Experts attribute the increase in oil reserves to the worsening epidemiological situation in the United States and the resumption of quarantine measures in many states. US fuel consumption peaks during the summer, but the EIA has noted a significant drop in fuel demand in recent weeks due to the spread of COVID-19.
There are other market pressure factors in the market, but investors are ignoring them for now. Investors are closely following the development of a new diplomatic conflict between the United States and China. On Wednesday, the United States demanded to close the Chinese consulate in Houston until Friday, accusing it of espionage and theft of intellectual property. China has pledged retaliation. News agencies are reporting the possible closure of the US Consulate in Wuhan.
The conflict between the world's two largest economies and energy consumers could significantly slow down the global economic recovery.
Regarding the chart, the price resumed its upward movement after testing the support at 41.30. Today we are expecting a breakdown of resistance at 42.30 and the growth of quotations towards the level of 43.75.
The main scenario - a breakdown of resistance at 42.30.
An alternative scenario - a breakdown of support at 41.30 and a decline in the direction of 38.70.
The current fundamental outlook is moderately negative. Despite the negative fundamental background, bullish signals still prevail on the chart. Within the day, we would prioritize longs with entry points near the level of 41.30.
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