On Wednesday morning, oil prices continued to move lower due to concerns about the prospects for a recovery in energy demand and a decrease in demand for risky assets.
The latest data indicate an increase in COVID-19 diseases in some countries in Europe, India, the UK, certain US states and other regions. Investors expect the introduction of more stringent quarantine measures, which will inevitably affect the regional economies and the level of demand for energy. According to Johns Hopkins University, the number of cases worldwide also continues to rise, approaching 27.5 million as of September 9.
Investor sentiment deteriorated further after AstraZeneca Plc announced the suspension of final trials of the COVID-19 vaccine due to an unknown illness of one of the subjects. The company was previously considered a leader in the race to develop a coronavirus vaccine.
Additional pressure on oil is exerted by the general situation on the stock markets. After the tech crash on Wall Street, Asian and European indices were trading in the red zone on Wednesday. Investors' appetite for risk continues to decline.
Today the focus of the market will be on the EIA's monthly energy forecast and API inventory data.
On the chart, the price has broken through all the nearest local support levels. Including a fairly strong level of 37.00. In this situation, the priority remains the scenario with the development of a downward movement. A promising target is the level of 34.50. A reversal signal will be generated after quotes rise above 37.50.
The main scenario - growth to 37.50 and a renewed downward movement.
An alternative scenario - growth above 37.50 and a pullback to 36.80.
The current fundamental outlook is negative. We consider shorts around the 37.50 mark.
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