Oil: market participants took a wait-and-see attitude before Powell's speech

On Tuesday, May 2, oil trading ended in a slight plus. A barrel of Brent fell 1.49% to $105.93. Trades were relatively calm. On the daily timeframe, the price is trading in a tight range that has been shrinking since March 8th. Market participants are waiting for the US Federal Reserve meeting. This is an important event for all markets.

The oil market was supported by the report of the American Petroleum Institute (API) on oil reserves, as well as reports that the European Union is working on new sanctions against Russia that will affect the oil industry. It is planned to give countries dependent on Russian oil up to 20 months to refuse oil supplies. The adoption of a new package of sanctions will require a unanimous vote of all 27 countries that make up the European Union.

According to the latest API data, last week
oil inventories decreased by 3.479 million barrels (expected -0.8 million barrels), gasoline inventories - by 4.500 million barrels (expected -0.6 million barrels), distillate stocks - by 4.457 million barrels (expected -1.3 million barrels) .

On Wednesday, May 3, a barrel of Brent costs $105.82 at auction in Asia. Sharp price fluctuations in the market are expected after the announcement of the decision of the US Federal Reserve on interest rates and the speech of J. Powell. A symmetrical triangle has formed on the daily TF. It is a bullish trend continuation pattern. Since the price did not manage to get out of it in time and filled all the space within the boundaries, now the situation is estimated as 50/50. A sharp movement may also be in the direction of the $90 per barrel level.

We are waiting for official data on oil and petroleum products reserves from the US Department of Energy and J. Powell's speech. The situation should clear up next month.