US crude inventories rose by 15.2 million barrels in week to 3 Apr, in the biggest weekly crude stocks rise in the history.
The news were not a big surprise to the markets, although consensus was much lower (9.2 mln bls) after previous week’s build of 13.8 million barrels.
In the situation when the world is paralyzed by coronavirus pandemic which slashed global demand and the output is near its record high, while the world is flooded by oil, the results of the weekly crude stocks report cannot be different.
Oil price was in a free fall in such environment in past three months and reached the lowest levels in nearly two decades.
So far, oil price managed to stay afloat above critical $20 support, with some optimistic tones about possible deal between the main world oil producers in reducing the output and ending the price war, having inflated the price, but initial enthusiasm which pushed the oil price near psychological $30 level, quickly faded on signals that oil producers delayed their meeting.
The OPEC+ group is due to meet tomorrow and all eyes on that event, keeping oil prices in tight ranges today.
If the group agrees to reduce the output (as members declared their readiness to do so), by expected minimum 10 mln bpd that would improve the sentiment and boost oil price for attempts through pivotal barriers at $30 and $32.76 (psychological / Fibo 38.2% of $54.62/$16.24 bear-leg respectively).
In case that cartel members fail to agree, fresh pessimism in the market would push oil price back to $20 zone, with increased risk of eventual break lower.
Res: 24.98; 25.26; 27.21; 28.21
Sup: 23.73; 23.51; 23.01; 21.68
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