Oil: buyers began to take profits

On Tuesday, May 31, according to the results of the day, Brent crude oil fell by 4.46% to $116.26 per barrel. The fall began with the appearance of the first quote of the new day. Since the price was at a key resistance level, the rule most likely worked: buy on rumors - sell on facts.

When European leaders agreed on a partial ban on Russian oil imports, prices moved down. By evening, Brent fell from $121.68 to $115.16. Buyers began to take profits due to the fact that the embargo would actually come into force only after 8 months.

The new package of sanctions will apply to crude oil and oil products, with the temporary exception of crude oil supplied through the Druzhba pipeline. The decision to impose a partial embargo is a compromise due to the position of Hungary.

On June 1, an OPEC+ meeting will be held at which oil exporters will discuss oil production plans for July. The Alliance will stick to their agreements. The group is expected to approve a modest 430,000 bpd increase in production despite EU sanctions on Russia.

On Wednesday, June 1, at auction in Asia, Brent oil costs $115.90. In order for buyers to pass the $120-121 level, they need to rest a bit and regroup. For acceleration within the framework of the correction, they can retreat to the level of $113. If this level does not hold, the bullish momentum will begin to fade and $106/bbl will appear on the horizon.

The official report on stocks of oil and petroleum products from the US Department of Energy will be released on Thursday due to a holiday in the United States on Monday.