WTI crude oil recovered to $ 27.93 per barrel during the trading session on Thursday. Daily growth was 7.25%. The initiative remains with buyers on Friday. By 9:00 Moscow time, the cost of one barrel of oil already exceeds $ 28.50.
Quotes are supported by signs of increased consumption amid a softening of quarantine measures previously used to prevent the spread of the coronavirus pandemic. In particular, a recovery in demand is observed in various regions of China, as well as some countries in Europe and the United States, gradually returning to normal life. Last week, oil refining at the Chinese refineries rose to almost the pre-crisis level of 13.3 million barrels per day, which is almost 3 million barrels per day higher compared to the minimum reached at the end of February. At the same time, despite the positive dynamics of the countries' gradual exit from the state of economic suspended animation, in May world oil consumption will still remain at low levels and will likely be 21.5 million barrels lower than a year ago.
On the side of oil buyers are also joint measures to reduce oil production undertaken by leading hydrocarbon exporters, including Saudi Arabia, Russia and the United States. Recall that in April, OPEC and 10 oil-producing partner countries of the cartel agreed on a total reduction of production by 9.7 million barrels. This agreement entered into force on May 1. Market participants believe that the cleanliness of countries in fulfilling their obligations to reduce production coupled with a gradual recovery in demand will accelerate the process of rebalancing the market. However, how clearly the terms of the transaction were met will become known only after the next report of the OPEC ++ technical committee, which will be presented only at the end of the month.
The key risk for the oil market remains the upcoming expiration of the June WTI contracts, which begins on May 19. Given the lack of storage capacity, the number of buyers of nearby futures may be reduced. In addition, memories of the expiration of May futures and the fall of oil quotes to negative values are still fresh. Against this background, we recommend that you refrain from buying hydrocarbons until May 19.
WTI SellStop 27.50 TP 23.50 SL 28.20
Analytical reviews and comments on them reflect the subjective opinion of the authors and are not a recommendation for trading. Posted by Artem Deev Trader Analyst at AMarkets . The social network of forex traders is not responsible for possible losses in case of using review materials
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