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American refineries started to lay off employees

Oil prices remain under strong pressure due to a worsening epidemiological situation in the world and fears associated with an increasing imbalance towards excess supply.

 

Data from the American Petroleum Institute (API) on Tuesday showed a decline in oil reserves by 0.831 million barrels. Experts predicted an increase of 1.4 million barrels in a week. But this data was not enough to contain the fall in oil prices.

 

Investors are worried about the worsening epidemiological situation in the world, which could lead to the introduction of new strict quarantine measures and a decrease in economic activity in many regions of the world. This will inevitably lead to a decrease in energy demand.

 

The deteriorating state of affairs in the industry is evidenced by the fact that large refineries in the United States have begun to lay off workers. The management of the largest refinery in the United States, Marathon Petroleum Corp., recently announced a significant reduction in the number of employees in order to maintain profit targets.

Additional pressure on oil prices is exerted by the general situation on stock markets. Today, all major global indices are trading in the red zone, reflecting low investor interest in risky assets.

 

In the economic calendar today it is worth paying attention to the publication of the EIA's weekly report on oil and oil products reserves.

 

A sharp downward reversal of the price occurred on the chart. We are expecting a further bearish wave. The medium-term target is the level of 37.30.

 

  • Resistance levels: 39.55, 40.50, 41.40.

 

  • Support levels: 38.60, 37.30, 36.60.

 

The main scenario - an increase to 39.55 and a fall below 38.60.

 

Alternative scenario - a consolidation above 39.55 and growth to 40.50.

 

The current fundamental outlook is negative. We consider shorts from the level of 39.55.

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