The price of oil is preparing to reduce
The oil market to 16 Oct remains under pressure “bears”, but sales locally stopped. The overall market sentiment remain very careful. A barrel of North sea Brent crude oil today is trading around 81,00 USD with a weekly minimum value 79,85 USD. A barrel of light oil WTI costs of 71.70 USD.
As the data of the U.S. Commission on commodity futures trading (CFTC), global investors in October to reduce the amount of “net” long position in futures contracts on Brent crude. By 9 October the figure dropped to three-week low and amounted to 475,5 thousand contracts (-6,4 million). The volume of long positions is also made up of at least three weeks, the volume of short positions – four-week peak.
The behavior of the U.S. dollar, on the one hand, gives the commodity sector, the ability to stabilize after the sale. On the other, the recent rally in the “black gold” a good inspired the American shale companies – for them, the more expensive oil is, the more profitable the production and its expansion.
In this light, in fresh statistics on energy reserves in the U.S. this week, we may see the growth of stocks of oil and oil products. Last week, the indicators increased significantly than gave the bears a reason to become more active. It cannot be excluded that this time the situation repeated.
Considering the current dynamics of quotations on the 4 hour timeframe, the observed downward trend development. The downtrend has corrected the previous medium-term trend growth of 38.2% on the Fibonacci scale. If we consider the current situation from the point of view of graphical analysis, it is worth noting that, having tested the support line of the descending channel, the market tries to go lower the projection channel.
Considering these patterns together, it can be assumed that, decreasing in the projection corridor, quotes will be aimed at grades 78,63 (corresponds to 50.0% Fibo) and 76,61 (corresponds to the level of 61.8% of Fibonacci). The resistance for the current downtrend is the level 83,08.