Oil price dynamics are positive due to a decrease in oil production in the Gulf of Mexico and a positive outcome of negotiations between the US and China.
A severe tropical storm forced oil companies to shut down 82% of offshore oil production in the Gulf of Mexico. Oil production fell by 1.5 million barrels per day, which is about 14% of the total production in the United States. Forecasts predict bad weather in the region throughout the week.
Discussions between US Trade Representative Robert Lighthizer, Treasury Secretary Stephen Mnuchin and Chinese Deputy Prime Minister Liu He concluded this morning. During the videoconference, the parties discussed the terms of the interim trade agreement. Representatives of the United States and China assessed the negotiations as constructive. The parties discussed the possibility of creating more favorable conditions for the implementation of the first phase of the trade agreement.
Today in the economic calendar investors should monitor the publication of API data on US oil reserves. Experts expect a reduction in stocks for the fifth week in a row. If market expectations are confirmed, oil prices may continue a moderate upward movement.
Regarding the chart, the situation practically did not change during the day. Trades are still constrained in the flat channel with borders at the levels 41.80-43.20. Within the flat trend, we can expect the development of a moderate upward movement to the level of 43.20.
The main scenario - an increase to 43.20.
An alternative scenario - a decline to 41.80.
The current fundamental outlook is neutral. We consider both longs and shorts from the borders of the 41.80-43.20 channel.
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