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WTI price may drop below $ 59

Oil prices are recovering today after three days of active sell-off, but investors remain cautious prior to the OPEC + meeting tomorrow.

The main focus of the market is on the upcoming meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies. The comments made on the eve of the meeting indicate that the participating countries are generally positive about the situation on the market. Production restrictions helped stabilize the market and restore prices. It is expected that following the meeting, the OPEC + countries will agree on a gradual increase in production by 0.5 million barrels per day, and Saudi Arabia will not extend the voluntary production cut by 1 million barrels per day.

Investors will also be watching closely the EIA's weekly report today, after the API reported a sharp rise in inventory levels of more than 7 million barrels. The sharp increase in the indicator is due to an abnormal cold snap in Texas and the suspension of the work of many processing plants.

The API data is in stark contrast to the experts' predictions in the EIA report. Reduction of reserves by 0.928 million barrels is expected.

The downward vector of price movement remains the priority on the chart. We are waiting for a decline in quotations to the level of 58.50.

  • Resistance levels: 60.90, 61.45, 62.25.
  • Support levels: 58.80, 58.50, 57.20.

The main scenario is a pullback to 60.90 and a decline to 58.50.

An alternative scenario is a decline from current levels to 58.50.

The current fundamental background is neutral. We consider shorts from the level of 60.90.

 

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