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Oil is still constrained in a flat

The oil market is in the red zone on Thursday. Weaker EIA data on reserves, the results of the OPEC technical committee meeting and the recovery of the US dollar put pressure on oil prices.
According to the Ministry of Energy for the reporting week, oil reserves in the United States fell by only 1.6 million barrels, while experts expected a decline of 2.7 million barrels. At the same time, the US Energy Information Administration (EIA) noted that the demand for fuel over the past 4 weeks has decreased by 14% compared to the same period last year.
Following the meeting of the OPEC Monitoring Committee, the participating countries noted lower than previously expected rates of recovery in the oil market. At the same time, the risks of the start of the second long wave of the COVID-19 pandemic have significantly increased. Despite the difficulties, thanks to the efforts of the OPEC countries, in July it was possible to narrow the gap between the level of demand and supply and significantly slow down the pace of increase in oil and oil products reserves.
Before the start of the meeting of the monitoring committee, the head of the Ministry of Energy of Saudi Arabia, Abdel Aziz bin Salman Al Saud, noted that the fundamental indicators of the oil market have improved in recent months. He expects demand to recover in the 4th quarter to 97% from pre-crisis levels.
A significant factor of pressure on the entire commodity sector is now the dynamics of the USD. After the publication of the minutes of the FOMC meeting, the American currency regained a significant part of its previously lost positions. Today the USD is holding the levels reached yesterday.
The flat trend continues to develop on the chart with borders at levels 42.50-43.20. Today we are expecting further consolidation in this range.
• Resistance levels: 43.20, 43.75, 45.00.
• Support levels: 42.50, 41.80, 41.40.
The main scenario - a flat trend in the range 42.30-43.20.
An alternative scenario - a breakdown of the support at 42.50 and a decline to 41.80.
The current fundamental outlook is neutral. We consider trading based on the borders of the flat at 42.50 and 43.20.

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