WTI crude oil is at a decrease of more than 5%, whereas Brent is losing about 3%.
There are growing concerns in the market regarding an increasing imbalance towards oversupply. Experts say that at the current rate of increase in oil reserves, the storage facilities in the United States and other countries will soon be full. OPEC + efforts to reduce production by 9.7 million barrels are not yet enough to stabilize the market situation. Saudi Arabia's statements that the total reduction in production could reach 20 million barrels, due to voluntary reduction in production in the US, Canada and other countries, was almost ignored by investors.
Many experts predict a further decline in oil prices since the epidemiological situation in the world remains difficult. The virus cannot be controlled. The negative impact of coronavirus on the global economy remains unchanged, so energy demand will remain at a record low.
Regarding the chart, bearish signals still prevail. Having fixed below the level of 25.50, the price continued to move down and today tested support at the level of 23.20. Bears build up pressure. In the near future, we can expect a breakdown of support at the level of 23.20 and a decline in quotations towards 21.30.
The main scenario - a breakdown of support at the level of 23.20 and a decline towards 21.30.
An alternative scenario - an increase towards 25.50 and further downward movement.
The current fundamental outlook is moderately negative. We prioritize shorts. Entry points are to be sought near the level of 25.50.
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