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Oil prices decline due to news of possible unblocking of the Suez Canal

On Monday, oil prices fell by more than 2% after the news of rescue crews managing to launch the container vessel Ever Given, which has been blocking the Suez Canal for almost a week.

According to Reuters, the container vessel is fully launched and its engine is running. Rescue teams will check before attempting to move it. Considering the above, investors are selling oil in the hope that the Suez Canal will be unblocked in the near future.

European news also exert additional pressure on the market. Over the weekend, Angela Merkel announced the possible introduction of a curfew in the country to curb the spread of the coronavirus.

In recent days, oil trading has been very volatile. Investors tried to assess the degree of influence on the market of various fundamental factors. Oil prices were supported by reports of the blockage of the Suez Canal. The counterbalance was the news about the worsening epidemiological situation in Europe and the worsening prospects for energy demand. The unblocking of the Suez Canal will shift the balance in favor of sellers.

On the chart today, we are watching the level of 60.00. If the price rises above this mark, today we can expect a retest of the resistance at 61.45. If buyers keep the price below 60.00, the scenario with the development of a downward movement to 57.20 remains the priority.

  • Resistance levels: 60.00, 61.45, 63.40.
  • Support levels: 57.20, 55.35, 51.80.

The main scenario is a decline to 57.20.

Alternative scenario - breakdown of intraday resistance at 60.00 and rise to 61.45.

The current fundamental background is moderately negative. We consider shorts from the levels of 60.00 and 61.45.

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