Oil prices declined on Monday amid fears of an increasing imbalance in supply and demand amid increased production and a limited recovery in consumption due to COVID-19.
Over the weekend, Fed Chairman Jerome Powell noted that he expects an accelerated economic recovery and an improvement in the labor market in the coming months, but added that the COVID-19 pandemic remains a threat.
The fact that the pandemic continues to pose a threat to the global economy is confirmed by published data from India, where almost 169 thousand new cases of virus infection were registered per day. Thus, the country bypassed Brazil in the total number of cases and is the second, after the United States, most affected by the pandemic. At the same time, India is one of the largest oil consumers in the world.
Investors also continue to closely follow the progress of negotiations on the Iranian nuclear program. Against the background of successful negotiations, Iran may increase its oil production, which will become another factor of pressure on the oil market.
The bearish signals still prevail on the chart. The price came out of the sideways, which was formed below the level of 59.90, down. In the near future, we expect the development of the downward movement to 57.20.
The main scenario is a decline to 57.20.
An alternative scenario is a breakdown of the resistance at 59.90 and an increase to 61.85.
The current fundamental background is negative. We consider shorts near the level of 59.90.
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