On Wednesday, oil prices are showing a moderate response to an unexpected decline in US oil inventories. According to the API report for the week, the level of commercial oil reserves fell by 1 million barrels, after rising by 12.8 million barrels last week. API data signals that refinery operations are gradually returning to normal following an abnormal cold snap in Texas. The published report runs counter to the general expectations of the market, as within the framework of the later published EIA report, an increase in the level of reserves is forecasted by almost 3 million barrels. The API data indicates that the actual values may be lower than the predicted data.
Reports of problems with vaccination of the population in the EU countries continue to exert downward pressure on the market. Investors fear that this could delay the lifting of quarantine restrictions and slow down the pace of economic recovery in the region. Fuel demand will also recover at a slower pace than previously predicted. For comparison, according to the latest data, the demand for automotive fuel in France in February decreased by 10.8% compared to the data for the same period in 2020. A similar trend is observed in other EU countries.
On the chart, the price is holding within the boundaries of the horizontal channel of 63.40-66.20. Today we expect a moderate rise in quotations to the upper border of the channel.
The main scenario is a decline from current levels.
An alternative scenario is an increase to 66.20 and a downward reversal.
The current fundamental background is neutral. We consider shorts at levels 65.50 and 66.20.
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