This morning, the market has seen an increase in oil prices after its 20% drop from the January peak. The signals of the oversold market caused the growth.
At 8:30 Moscow time, April futures for European Brent crude oil are trading at around $ 54.6 per barrel. This is $ 0.65 or 1.2% higher than they cost at the close of the previous session. Yesterday this asset fell by $ 0.49 or 0.9%.
At the same time, American crude oil has grown by 0.55 US dollars and is currently trading at 50.16 US dollars per barrel. For comparison, the asset ended yesterday’s session at around $ 49.31; an intraday drop amounted to $ 0.5 or 1%.
In early January, there was a peak of oil quotes. Compared with January high, the prices for both crude oils have declined by more than 20%. This clearly indicates a “bearish” trend in the energy market.
The Relative Strength Index (RSI) for WTI has dropped to a value of 30 points. This is a clear indicator of the oversold market.
The advent of the Chinese coronavirus will lead to a significant reduction in global oil demand this year. OPEC experts have estimated that the demand may fall by 400 thousand barrels per day.
The data on the volume of oil reserves in the United States affect the market too. Preliminary data from the American Petroleum Institute (API) indicate an increase in reserves of 4.18 million barrels over the past week. Official statistics from the United States Department of Energy will be published tonight.
Today, the meeting of the Technical Committee that monitors the OPEC+ agreements is also continuing. The Committee will decide whether to gather the energy ministers of the OPEC+ countries to discuss the next reduction, or whether there is no need in such a meeting.
By the way, yesterday it became known that Saudi Arabia was actively promoting the initiative to further reduce oil production by half a million barrels per day.
The material was prepared with the participation of Katya Wilson,
a leading analyst of the brokerage company UFT Group