Oil quotes have pulled back from the minimums

Brent oil prices have been falling due to the weak eastern economy while the futures of the US analogue WTI were rising based on the data regarding the oil reserves reduction in the United States.
Another factor that influences oil quotes- are the Asian markets. Japanese manufacturers’ confidence index for the month fell to an eight-month minimum, and is likely to continue to fall due to the slowdown in the Chinese economy. It should be noted that in China, during the past month, budget expenses have increased by 25.9% in comparison to the same month last year, because in such a way the government wishes to maintain the economic growth; however, the Chinese stock markets have collapsed on Tuesday, announce the specialist of Fort Financial Services.
In addition, Iraq has warned foreign oil companies developing fields in the southern part of the country that they need to reduce the investment in 2016, as the budget estimates for the payment of services has decreased due to falling oil prices.
Foreign oil companies, among which are highlighted Lukoil, BP, as well as Royal Dutch Shell and Eni, engaged in the development of the southern Iraqi fields based on the agreed service contracts and receive an additional fixed fee for every extra barrel of oil produced. Because of the worldwide price drop of the “black gold”, Iraqi profits from its sale have dropped making it difficult to make the necessary payments to companies.
The department of the Iraqi oil industry has requested the companies to prepare new budgets and work plans for the next year until the end of this month, and has further demanded to reflect the significant reduction in budget spending on steel, services and equipment.
Forecasters from Morgan Stanley significantly reduced the forecast of oil production in Iraq over the next five years, and are now expecting production decrease until 2020. The country has decreased its own forecast by 60%, in other words, to the level of 5.5-6 million barrels per 24 hours until the end of the decade comparing to the current 3.8 million.
This month, OPEC also revised expectations on oil demand in 2015, increasing it by almost 84 thousand b/d. In accordance with the cartel materials, the rate of the demand for "black gold" this year will increase by 1.46 million b / d. Next year the oil demand will increase, according to OPEC expectations, by only 1.29 million b/d. This forecast was lowered, in comparison to the previous month’s forecast, by about 50 thousand b/d. As a result, the worldwide demand for the black gold this year will be 92.78 million b/d, and 93.99 million b/d next year.
Moreover, this month, OPEC has revised the indicators on oil production by countries not included in the cartel, announce the analysts of FortFS. For example, this year’s supply of “black gold” by countries that do not belong to OPEC will only rise by 880 thousand b/d (while earlier OPEC has announced the supply will increase by about 950 thousand b/d). Next year, countries that are not included in the cartel, will increase their supply by 160 thousand b/d, announces OPEC.
By the end of trading on Tuesday, Brent oil quotes have dropped to the minimum and have closed at over 47 dollars per barrel. On Wednesday, the increase continued based on the information of the unforeseen decrease in the US oil inventory. Last week the inventory has decreased by 3.1 million barrels at the time when it was expected to increase by 1.2 million barrels.
You may learn how events influence the quotes of the “black gold” on the website.
MACD is in the negative zone and below its signal line. The price and the histogram move synchronically.
Stochastic Oscillator has come out of the oversold zone. Line% K is above line %D, and both are moving in an upward direction.
Resistance levels: 48.40, 50.00, 51.60
Current price: 48.03
Support levels: 47.00, 45.00
Trading recommendations
Support is located at 47.00 dollars per barrel. The breakthrough will bring the quotes to the level of 45.00 dollars per barrel. Resistance is located at 48.40 dollars per barrel. The breakthrough will bring the quotes to the level of 50.00 dollars per barrel.