Oil market is commencing new trading week with decline on the back of tensed situation in international trading and concerns of investors regarding the lowering of demand in crude oil. Brent crude grade has resulted last week with a loss in price of nearly 11,3% and decline for the month has made more than 12%. WTI has become cheaper 8,9% last week and more than 13% for a month.
The subject for crude prices’ slump was quite aggressive protecting policy of the White House, that produced a solid negative impact on development of Chinese economy and economies of other countries. On Friday Trump has made a new claim promising to apply higher tariffs on Mexican goods due to unwillingness of country authorities to resolve the issue with migrants.
The hope of investors for recovery of global economy growth has eased substantially on the back of aggravation of the situation in world’s economy. Traders are actively selling out dicey assets including crude oil.
An extra factor of pressure on the market remains to be the industry statistics from the U.S.. On Thursday oil inventories data was released, that proved to be worse than forecast expectations of the market. On Friday Baker Hughes data on growth of oil rig count by three units was delivered. All this points, that United States are intended to continue boosting crude production inside the country.
Now the crude oil is being traded at its lowest since mid-February and remains under a very strong pressure. The main stock indices are still being traded in the red reflecting low level of demand in dicey assets, therefore prospects for recovery of the oil market look limited so far.
The price on the chart continues to plunge down breaking all mid-term support levels. In this situation an apparent priority retains with scenario of further development of bearish movement in direction of the important psychological mark at 60.00. At the same time a new wave of decline can be formed only after development of local retracing movement, therefore short-trades of the asset is worth to consider not lower than the 63.60 level.
Resistance levels: 63.60, 66.00, 68.80;
Support levels: 61.30, 60.60, 66.00.
Main scenario: Correction to the 63.60 region and resuming of downward movement.
Alternative scenario: Further decline of the quotes from current levels.
On the market a strong bearish trend continues to prevail, therefore we still should give preference to short-trades, but we should seek for entry points not lower than the 63.60 level, since there is a high probability of retracing movement forming from current levels.