Friday, February 8, 2019

The oil market is waiting for data on stocks in the US

Despite all the attempts of the "bulls" to drag Brent oil (UKOIL) above $ 64 a barrel, locally the initiative is still reserved for the sellers. Brent consolidation in a narrow range of $ 60-62 per barrel, continuing from December, indicates the absence of powerful fundamental triggers on the market. Probably, market participants are waiting for the outcome of the trade dispute between the United States and China, which for a long time remains the key reason for constant talk about the prospects for a slowdown in global economic growth, directly affecting the demand for raw materials.

The trade truce between the countries expires in March, which means that the US and China have only one month left to resolve all differences and sign a bilateral trade agreement. Otherwise, concerns about the future growth rate of the world economy will condemn the oil market to a long-term decline. Until then, we recommend working with a local news background.

According to forecasts, the Energy Information Administration will report a decrease in oil reserves, which is fully in line with expectations for the refinery’s seasonal maintenance period. In this scenario, oil quotes are fully capable of resuming previous growth. An additional factor in price support may be a weak dollar. We remind you that the decline in the US currency has a positive effect on raw materials whose value is denominated in dollars. Considering the above, “long” positions on oil look more promising.