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Oil prices remain under pressure due to concerns about the outlook for a recovery in demand in Asia

Oil prices fell slightly on Monday amid lingering fears that a new wave of pandemic in India and Japan, the world's third and fourth largest oil importers, will reduce fuel demand in Asia.

 

Indian Prime Minister Narendra Modi said Sunday that India was rocked by a "storm" of infections as the country set a new world record for the highest number of COVID-19 infections in a day with 349,313 cases and 2,761 deaths per day!

 

In Japan, a third state of emergency was declared on Sunday in Tokyo, Osaka and two other prefectures. The restriction affects almost a quarter of the population. The country is trying to stop the spread of the virus just three months before the opening of the Tokyo Olympics.

 

The oil market can also be negatively affected by the fact that many speculators have transferred their funds to other commodity assets (soybeans, corn, etc.) due to an increase in value. Prices for corn, wheat and soybeans hit multi-year highs last week due to crop damage caused by cold weather in the US grain belt.

 

The central event of the week for the oil market will be the OPEC + meeting, which will be held later.

 

Bearish signals prevail locally on the chart. Within the day, we are waiting for a decline in quotations to the level of 60.80. If the price breaks this level, then in the next few days we can expect a decline to 59.40.

 

  • Resistance levels: 62.50, 63.80, 64.70.

 

  • Support levels: 60.80, 59.40, 57.20.

 

The main scenario is a correction to 62.50 and a decline to 60.80.

 

An alternative scenario is a decline to 60.80 from current levels.

 

The current fundamental background is moderately negative. We consider shorts near the 62.50 level.

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