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Oil prices decline amid rising inventories and new travel restrictions

In trading on Wednesday, oil prices are down by more than 1% due to data on rising fuel inventories in the United States and the introduction of new travel restrictions.

The data published by the American Petroleum Institute showed that the supply of crude oil in the United States increased by 2.7 million barrels over the week. Experts surveyed by Reuters had expected a decline of 3.25 million barrels.

 

The rise in the level of oil reserves in the United States is taking place during the introduction of new restrictive measures around the world. More than 40 countries have already suspended direct flights with the UK due to the discovery of a new strain of coronavirus B.1.1.7 there. Investors fear that further tightening of the quarantine will lead to a decrease in energy consumption and an increase in the imbalance in the market.

 

Additional pressure on the market came from unexpected news from the United States, where Donald Trump refused to sign a new stimulus bill amid a pandemic. Trump complained about very small payments to the population and asked for a restructuring of the stimulus package.

 

In the afternoon, investors will be watching the statistics from the EIA. The level of reserves is expected to decline by 3.2 million barrels.

 

A new bearish wave is developing from the 48.00 level. The target is the level 44.80. We look forward to further decline.

 

  • Resistance levels: 48.00, 49.20, 50.00.

 

  • Support levels: 46.00, 44.80, 43.50.

 

The main scenario is a decline to 44.80.

 

An alternative scenario is growth from 46.00 to 48.00.

 

The current fundamental outlook is moderately negative. We consider shorts near the 48.00 level.

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