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Oil prices remain under pressure

Trading in Asia on the oil market was closed in the red zone. Investors continue to sell oil on heightened fears of new quarantine measures in Europe.

In recent days, there has been a sharp increase in the number of new cases of COVID-19 infection in the EU countries. Many EU countries were forced to tighten quarantine measures again. Germany is considering extending the current restrictions for another 5 months. The extension of restrictions in Europe runs counter to market expectations. Previously, many investors have relied on a rapid recovery of the European economy and energy demand after the relaxation of quarantine measures. It was expected that this would happen in mid-spring. But, despite an active vaccination program, the incidence in the EU countries began to rise again.

It is obvious that the energy market is still far from recovery. Many experts even say that the level of oil consumption will no longer reach pre-crisis levels.

Additional pressure on oil prices is exerted by news from the United States. The number of active rigs in the US continues to rise, according to data released on Friday.

Pay attention to the resistance level 61.45 on the chart. While the price remains below this level, we consider a scenario with a price decline towards 59.15 as a priority.

  • Resistance levels: 61.45, 63.40, 66.20.
  • Support levels: 59.15, 57.20, 55.35.

The main scenario is a decline to 59.15.

An alternative scenario is a breakdown of resistance at 61.45 and an increase to 63.40.

The current fundamental background is moderately negative. We consider shorts from the level of 61.45.

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