Oil market has closed Monday’s session in the red. Brent crude grade has tumbled 3,1%, WTI lost almost 1,5% of its price.
The major factor that pressures the market is situation with escalated trade dispute between USA and China, that may drive to substantial slowdown in global economy and reduction of global fuel demand. Many analysts say, that oil price can extend its decline till the end of the week on the back of worsening market conditions.
Also traders continue to follow the situation in the Persian Gulf. According to reports of mass media Great Britain in cooperation with USA is intended to take part in operation on maritime protection in the Strait of Hormuz from the Iranian threats. Such decision was taken by authorities of the United Kingdom after EU countries refused to take part in this operation, which details are not disclosed so far.
Today Brent crude has renewed annual trading low, that resides at the 58.75 mark now. This triggered partial close of short positions and corrective bounce of the price to the upside. But overall trend on the market is bearish.
Today besides geopolitical news it’s noteworthy to pay attention to API report on oil inventories in the U.S.
On the chart oil price resumed downward movement after a slight corrective pullback from the 58.75 level. Therefore we should expect shortly a second testing of 58.75 at least. If bears manage to stabilize below this mark, the next target for price movement will be the 57.00 level.
Resistance levels: 60.35, 62.30, 64.70;
Support levels: 58.75, 58.00, 57.00.
Main scenario: Decline towards 58.75.
Alternative scenario: Stabilizing below 58.75 and decline towards 58.00.
Negative fundamental background rules the market. Bearish signals prevail on the chart. For intraday trading we give preference to short-positions considering them from the 60.35 level.