A barrel of Brent crude oil fell by almost 5%, what happens next?
Tuesday for the oil market is clearly a bad day of the week. A little more – and the market probably will get used to the phenomenal volatility in this day of the week, when the negative factors are gaining maximum strength, and the bears have nothing holding back.
On the eve of a barrel of Brent crude oil fell by almost 5% in February and tested a “bottom” at $61,71. Strong support at $60,50 indicated earlier, it is still relevant, but with each new bear attack it is getting closer. It’s time to identify what is under it – in the case of a successful breakout level of $60,50 during the new wave of reducing the target sellers will be the $54,50-$55.00 per barrel – a steep drop almost nothing hurt.
The key reason for the sales once a week, like clockwork – volatility, that is a huge mobility rates. About it told the head of the IEA, Fatih Birol. An additional reason for a bad mood was the news about plans to increase oil production from Kurdistan and Iran for Kirkuk oilfield. In addition, ROS DXY again, and when the dollar rises in price, sales in the oil to get acceleration.
However, no information from the American petroleum Institute about the pause in the growth of oil reserves or Indian news about the increase in imports of raw materials in Oct are unable to balance this negativity with emotion. API grew for the first time in eight weeks, the oil reserves of 1.5 million barrels. India last month bought the highest for seven years, the volume of oil that can indicate sustainable domestic demand.
Today, oil tries to bounce, it is natural and expected. To stabilize a barrel of Brent may be about $64, but for a rebound on need base. At the same time, it is clear that a new wave of decrease, and it will be pretty soon, will be at least weaker than the last two.