Oil prices are declining today due to rising COVID-19 cases and high levels of energy supplies.
The rise in COVID-19 infections undermines investor hopes for a smooth recovery in energy demand. Due to the worsening epidemiological situation in many US states, investors expect the introduction of new restrictive measures, which will inevitably be accompanied by a reduction in consumption. A significant increase in the number of cases is observed in other countries. India remains one of the leaders with more than 6 million cases of infection.
OPEC Secretary General Burkindo also had a negative impact on the market. He noted that oil reserves in OECD countries remain well above the average for the last 5 years. He noted that a slight decrease in this indicator is expected in the 4th quarter, but the total level of reserves will still exceed the 5-year average by about 123 million barrels.
Positive news for the market could come from Norway, where a workers' strike may take place on September 30, which could lead to a decrease in production by 0.9 million barrels.
Also, investors continue to follow the news about the clashes between Armenia and Azerbaijan, since this is one of the directions of oil supplies to the international market.
Regarding the chart, bulls failed to break through the resistance at 40.50. The price remains in the wide flat channel of 39.15-40.50.
The main scenario - a consolidation in the 39.15-40.50 channel.
An alternative scenario - a breakdown of resistance at 40.50 and an increase to 41.40.
The current fundamental outlook is moderately negative. We consider buying near the level of 39.15.
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