Oil prices came under pressure today following the release of API weekly reserves data. Unexpectedly, the level of reserves rose by 1.026 million barrels, as a severe cold snap in Texas led not only to a decrease in oil production, but also to disruptions in the operation of refineries. Some of them have completely suspended their work. Experts surveyed by Reuters expected to see a decline of more than 5 million barrels.
Now the main question that concerns the bidders is how quickly the mining and processing companies will be able to restore normal operation? There are concerns that production will recover faster than refining, which could lead to an increase in oil reserves and an increase in the imbalance between supply and demand.
Later today, the EIA weekly data on the dynamics of oil and oil products reserves will be published. It is expected to decrease by 5.19 million barrels. The API report increases the likelihood that actual values will be worse than market expectations.
There is a struggle for the 61.00 level on the chart. In case of a breakdown of this mark, the price may fall to 60.00, and possibly even lower.
The main scenario is an increase to 62.25 and a downward reversal.
An alternative scenario is a breakdown of 61.00 and a decline to 58.50.
The current fundamental outlook is moderately negative. We consider shorts from the level of 62.25.
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