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On the basis of a 691,000-barrel increase in private oil surveys and concerns over the potential reduction of demand from the resurgence of the coronavirus in many countries, the price of USOil declined in the Asian session to $39.55. However, USOil prices were able to turn back to over $40.00 during the European session this morning. Attention now turns to the official EIA oil inventory report due later today (14:30 GMT).
Aside from demand concerns, the appreciation of the US Dollar this week has been another important factor weighing on the price of USOil as it moves over $40.00 a barrel again. The price may continue to fluctuate throughout the week due to economic uncertainty and further statements by Fed Chair Powell (again) today and tomorrow, along with some significant data including US PMIs (today) and Durable Goods (Friday).
From a technical standpoint, the H4 oil price is swinging within the lines of the MA50 and MA200 forming a symmetrical triangle. The price is now stuck at the MA50 with the first resistance at yesterday’s high at $40.25 and the support at the low of the week at $39.00.
Fed Chair Powell’s ongoing statement and the EIA’s weekly inventories will be the driving force behind today’s volatility in oil prices.
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