Oil prices remain under pressure due to deadly coronavirus spread reports. Over the past day, new cases of virus infection have been reported in 15 countries. In total, the virus was confirmed in almost 4.5 cases with 107 lethalities. Investors fear that a deadly virus epidemic could seriously harm the world's second largest economy. This will have a negative impact on energy demand.
According to S&P Global Platts, OPEC countries are discussing ways to stabilize the market in the event of further spread of the virus and lower oil prices. Both an extension of the current agreement and a reduction in production quotas are being considered.
In the coming days, investors should follow the publication of weekly industry reports in the United States. Today the API data will be presented. On Wednesday, the US Department of Energy report will be released.
According to the graph, between the levels of 52.00-53.10 a flat is developing, within which we can expect the development of a moderate downward movement. The scenario with the development of an upward correctional wave, in the direction of the level of 54.00, will be relevant after the price consolidates above the target of 53.10.
Resistance Levels: 53.10, 54.00, 55.05
Support levels: 52.00, 51.00, 50.00.
The main scenario - a decline towards the level of 52.00.
An alternative scenario - consolidation above the level of 53.10 and growth towards 54.00.
The fundamental outlook is moderately negative. A flat is forming on the chart. Within the flat we consider shorts from the level of 53.10.
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