On Tuesday, oil prices are consolidating in a narrow range close to yesterday's intraday highs.
On Monday, oil prices were supported by stronger-than-expected PMI data from manufacturing sectors in Asia, Europe and the United States. The data indicate a recovery in industry, which will inevitably be accompanied by an increase in energy consumption.
At the same time, the market ignored the information related to China. Despite the economic recovery, in the first half of the year China purchased from the United States only 5% of the volume of purchases of energy resources provided under the interim trade agreement. Experts are confident that China will not be able to fulfill this part of the trade agreement until the end of this year. Failure to achieve this goal could further complicate relations between the United States and China, which have deteriorated sharply since the outbreak of the coronavirus.
Today we are expecting the publication of fresh data from the API on the dynamics of oil reserves. Reuters polls indicate that oil inventories could have dropped by 3.1 million barrels over the week, while gasoline stocks rose 0.6 million barrels and distillate stocks increased by 0.8 million barrels.
There is little upside potential on the chart. Buyers keep the price above the level of 40.75, so in the first half of the day we can see an increase in quotations to the area of 41.60. The bearish movement scenario remains the priority in the medium term. It is worth waiting for the formation of topping signals in the range 41.60-41.90.
The main scenario - growth to 41.60 and downward reversal.
Alternative scenario - consolidation above 41.60 and growth in the direction of 42.30.
The current fundamental outlook is neutral. We consider shorts in the range of 41.60-41.90.
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