Oil continues to decline due to rising fears associated with an excess supply of raw materials on the market. Investors continue to evaluate the impact of the coronavirus epidemic on oil demand in China and other countries. As the virus continues to spread, pessimistic sentiment prevails.
At the end of last week, the OPEC technical committee recommended participating countries to reduce production quotas by 0.6 million barrels per day, but this decision had practically no effect on the course of trading. Investors are not certain that OPEC+ countries will reduce production. On Friday, Russian Minister of Energy stated that Moscow needed more time to assess the current situation and make a final decision. Novok noted that the United States has recently reduced production, while global oil demand remains high.
The bearish trend still prevails on the chart. After a slight correction, the price resumed its downward movement. Now the bears are adding pressure on the level of 49.70. The probability of a breakdown of this mark is very high.
Resistance Levels: 50.50, 51.25, 52.00
Support levels: 49.70, 49.00, 48.80.
The main scenario - a breakdown of support at the level of 49.70 and a decline towards 49.00.
An alternative scenario - a breakdown of intraday resistance at the level of 50.50 and an increase towards 51.25.
The fundamental outlook is moderately negative. We consider shorts from the levels of 50.50 and 51.25.
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