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Oil prices rise after the publication of API data on reserves

Oil prices are rising for the second day in a row due to the hurricane in the United States, which disrupted oil and gas production in the Gulf of Mexico, and positive API data on reserves.

 

On Tuesday, more than 25% of oil platforms on the US shelf were closed due to Hurricane Sally. Export ports were suspended until weather conditions improved.

Rystad Energy estimates that due to Hurricane Sally, production will decrease by about 3-6 million barrels in 11 days.

 

According to the API report for the week, oil reserves in the United States fell by 9.5 million barrels. Experts had expected an increase of 2.05 million barrels. At the same time, the actual reserves of gasoline increased.

 

Official data on reserves from the EIA will be released later. Experts had expected an increase of almost 1.3 million barrels. The API report indicates actual values ​​may be better than predicted expectations.

 

Despite the decline in US oil reserves, the prospects for further recovery in oil prices remain mixed. The new wave of the COVID-19 pandemic is having a negative impact on global energy demand. The International Energy Agency and the Organization of the Petroleum Exporting Countries have lowered forecasts for the level of energy demand in 2020.

 

Indirect confirmation of these forecasts is provided by statistics from Japan, which is the fourth largest oil importer in the world. Imports of petroleum products compared to last year fell by almost a quarter.

 

On the chart, yesterday the price broke through the resistance at 38.70. Buyers have opened the way to the next resistance level at 39.50. The goal is almost achieved. We are waiting for the formation of reversal signals and the development of a new bearish wave.

 

  • Resistance levels: 39.50, 40.50, 41.40.

 

  • Support levels: 38.70, 37.30, 36.60.

 

The main scenario - a rise to 39.50 and a downward reversal.

 

An alternative scenario - a breakdown of resistance at 39.50 and growth in the direction of 40.50.

 

The current fundamental outlook is neutral. We consider shorts from the level of 39.50.

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