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Oil prices remain under pressure after API industry data release

Oil price declines on Wednesday amid renewed increases in COVID-19 cases globally and an increase in US crude oil inventories, raising concerns about an increasing imbalance between supply and demand in the market.

 

The number of COVID-19 cases in India, the world's third largest oil importer, continues to rise. The total number of infected as of April 21 has exceeded 15 million. On Tuesday, the country's authorities introduced a 6-day quarantine to contain the pandemic.

 

The epidemiological situation in Japan continues to deteriorate. Tokyo and Osaka city administrations intend to declare a state of emergency to limit the increase in the number of cases.

 

The API data released overnight showed that the level of oil reserves increased by 0.4 million barrels during the reporting week. Data from the US Energy Information Administration will appear later. The level of reserves is expected to decrease by almost 3 million barrels.

 

On the chart, yesterday the price dropped below the support at 62.60. This is a negative signal. While the price remains below this level, we consider the scenario with a decline in quotations towards the level of 60.80 as a priority.

 

  • Resistance levels: 62.60., 63.80, 64.70.

 

  • Support levels: 60.80, 59.65, 57.20.

 

The main scenario is an increase to 63.80 and a downward reversal.

 

An alternative scenario is a decline to 60.80 from current levels.

 

The current fundamental background is moderately negative. We are looking for sell signals in the area of ​​levels 62.60 and 63.80.

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