Oil is recovering today after falling by more than 4% on Monday. The dynamics of the dollar movement and optimistic sentiments regarding the prospects for the global economic recovery have a positive impact on oil prices.
Prospects for further recovery in oil prices remain limited due to the unexpected decision by OPEC + to gradually increase production levels. Following the meeting, it was decided to increase production by 0.35 million barrels per day in May, by 0.35 million barrels per day in June and by 0.4 million barrels per day in July. Also, Saudi Arabia intends to gradually abandon an additional voluntary production cut by 1 million barrels per day during these three months.
An additional factor of pressure on the market is the reports of an increase in oil production from Iran, which has been exempted from restrictions on OPEC's production.
OPEC + decision to gradually increase oil production contradicts market expectations that the pace of global economic recovery and energy demand in 2021 will be slower than previously expected.
Weekly API stock data will be released later today in the US.
On the chart, the prospects for the development of pullback movement are limited. Downward movement can be resumed from the current levels. If the level of 59.45 is broken, the price may rise to 60.40. Medium-term priority is on the side of the scenario with the development of the downward movement.
The main scenario is a rise to 60.40 and a downward reversal.
An alternative scenario is a decline from current levels.
The current fundamental outlook is negative. We are looking for short signals at levels of 59.45 and 60.40.
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