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Oil prices decline due to growing supplies from Libya and the worsening epidemiological situation

On Monday, oil prices fell amid reports of the resumption of oil supplies from Libya. Announcement of the National Hurricane Center in the United States about the approach of a new storm to the Gulf of Mexico is declined.

 

The Libyan Oil Company announced the lifting of the blockade from some ports and oil facilities that were previously occupied by militants. At the same time, it is not yet clear how many and which facilities have resumed work and what volume of supplies it was possible to organize, but the prospect of increasing supplies from Libya to an already saturated market puts downward pressure on prices.

 

Additional pressure on the market is exerted by reports of a worsening epidemiological situation in Europe. Several EU countries have resumed quarantine measures. The UK is considering introducing a new nationwide self-isolation. The worsening epidemiological situation will restrain further economic recovery in the region and the demand for energy resources.

 

The restraining factor for the bears are reports of the third storm in the Gulf of Mexico in the last month. Oil companies are mothballing oil platforms again. Forecasters predict Storm Beta will reach the coast tonight.

 

On the chart, the bulls were unable to cope with the resistance at 41.10 and the initiative shifted to sellers. Today we expect a breakdown of the support at 40.50 and a decline to the area of ​​39.35.

 

  • Resistance levels: 41.40, 42.10, 42.10.

 

  • Support levels: 40.50, 39.35, 38.60.

 

The main scenario - a breakdown of support at 40.50 and a decline to 39.35.

 

An alternative scenario - growth from 40.50 to 41.40.

 

The current fundamental outlook is moderately negative. We consider shorts near the level of 41.40.

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