WTI growth expected

WTI crude oil is trading near the support level of 58.00 USD per barrel. On Tuesday, quotes recovered to the level of 58.70 USD, but could not hold the position. Oil prices fell below the level to the escalation of the US-Iran conflict. Thus, we can talk about the end of the period of oil market growth due to geopolitical concerns in December and the new OPEC deal to reduce production.

According to a report by the American Petroleum Institute, stocks of raw materials last week rose 1.1 million barrels. Today, official data from the Energy Information Administration has been published. It has revealed a decrease in reserves of 2.5 million barrels.
 

Meanwhile, the US Department of Energy raised its forecast for the average price of WTI crude oil for 2020 to 59.25 USD per barrel against the December estimate of 55.01 USD. The revision of the forecast is associated with a recent price increase due to geopolitics and a new assessment of the level of oil production in the current year. According to the new forecast, US oil production in 2020 will increase by 12,000 barrels per day against the December forecast. And markets again face the risks of an imbalance in oversupply, which will lead to pressure on prices.
 

In our forecast, we assume a corrective recovery of WTI oil to resistance levels of 58.25, 58.50 and 58.70 USD per barrel.