On Thursday, the price of oil declines after a strong rise in quotations the day before.
On Wednesday, the US Energy Information Administration (EIA) reported a decrease in the level of oil reserves by almost 4.4 million barrels, while the forecast figure of +1.27 million barrels. At the same time, stocks of distillates increased by 3.5 million barrels. The overall level of stocks of distillates is at the highest values since 1991. Weekly fuel demand fell to 2.81 million barrels per day, which is 27.2% less than in 2019.
The US refiners' margins on distillate production are the lowest in 10 years. This is a powerful deterrent for refiners which indicates insufficient demand for energy in the United States. According to the EIA, last week, US refineries processed 13.5 million barrels of oil per day, which is 19.3% less than a year earlier. Hurricane Sally influenced the recycling rate in part.
Now companies have begun returning crews to offshore oil platforms in the Gulf of Mexico. The level of production in the coming days may increase by 0.5 million barrels.
According to Reuters, a group of OPEC + countries will hold a meeting today on the current situation in the oil market. But experts do not expect any important decisions to be made at the meeting.
A pullback movement develops on the chart after testing the resistance at 40.50. Strong support lies at 39.35. From the current positions, the decline can be continued.
The main scenario - a decline to 39.35 and an increase in the direction of 40.50.
An alternative scenario - a breakdown of the support at 39.35 and a fall to 38.60.
The current fundamental outlook is moderately negative. We consider shorts from the level of 39.35.
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