Oil prices rallied Wednesday after API data showed that US crude inventories unexpectedly dropped last week and China, the world's second largest oil consumer, reported its lowest daily COVID-19 rise since January 11.
The API report showed that over the week, US oil inventories fell by more than 5 million barrels. As part of today's EIA report, analysts polled by Reuters expect an increase in reserves by 0.43 million barrels. These APIs increase the likelihood that actual EIA data will outperform market expectations.
At the same time, investors are so far ignoring data on the dynamics of gasoline and distillate stocks. The API report showed that during the reporting week, gasoline inventories increased by 3.1 million barrels, while distillate stocks, including diesel fuel and heating oil, rose by 1.4 million barrels.
Fresh data from China on the spread of COVID-19 eased market concerns about the start of a new wave of the pandemic in that country. The number of new infections detected is declining. Official data showed that 75 new COVID-19 cases were detected in the country over the last day, the lowest daily increase since January 11.
On the chart, trading continues in a narrow range of 52.00-53.15. Today we are waiting for the continuation of the sideways trend.
The main scenario is an increase to 53.15 and a downward reversal.
Alternative scenario - decline to 52.00 from current levels.
The current fundamental outlook is neutral. We consider shorts from the level of 53.15.
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