Good afternoon, dear traders! In yesterday's review, I recommended buying wti oil at 22, today it costs $27.4 - 500p. A good profit for medium-term trading for the end of the week!
Why keep it going? There are a number of reasons for this, let's take it in order.
From a technical point of view, oil has come to perhaps the only resistance level of 27.5 in the bearish trend (see Figure above).
On the fundamental side, there is a whole set of factors in the direction of a further fall in black gold.
The government of Riyadh has ordered Saudi Aramco to continue delivering 12.3 million barrels per day to the market for several months. In fact, Saudi Arabia went all in against its own risks. Let me remind you that within the framework of OPEC, they committed to produce no more than 9.7 million, which is an increase of 30%. Plus additional discounts to Europe for 10 dollars below Brent. Against the background of a General drop in energy demand due to the coronavirus, this supply of oil will lead to unprecedented price drops. Yesterday, WTI tested $ 20 at a historical low of $ 17:
On the other hand, with low demand due to the recession in the global economy, there will soon be no place to store this amount of oil. Over this month, tanker rentals have grown astronomically, because they are used as storage facilities, but by summer, at this rate of production, they will all be fully filled. In the US, oil reserves will have nowhere to go by the summer. In fact, if the SAR does not give up dumping, the peak of low oil prices will be in the beginning or middle of this summer with prices much lower than $17 per barrel.
