Fundamental analytics

WTI and Brent updated annual trading lows

WTI

The oil market remains under pressure amid news of the coronavirus spread outside of China. Now WTI is testing the level of 48.00 for the first time since the beginning of January, 2019. Brent is at its lowest levels since the end of December, 2018 and maintains a downward movement vector.

 

Investors fear that the pandemic, largely limited to China, is now a global problem. The Center for Disease Control and Prevention (CDC) today confirmed the first human-to-human transmission of the virus in the United States.

 

Considering the aforementioned, investors expect a deterioration of the situation with the level of energy consumption in the world. OPEC+ countries cannot yet come to an agreement to reduce oil production due to Russia's tough stance. Obviously, in this situation, the imbalance in the direction of excess supply will increase.

 

Regarding the graph, we note the complete absence of reversal signals. The bearish trend continues. The next targets for sellers, apparently, are the levels of 46.00 and 45.00.

 

Resistance levels: 48.70, 50.20, 52.00.

 

Support levels: 46.00, 45.00, 42.50.

 

The main scenario - a correction towards the level of 48.70 and further downward movement.

 

An alternative scenario - a consolidation above the level of 48.70 and growth towards 50.20.

 

The fundamental outlook is moderately negative. We still prioritize shorts. We expect entry points to be found at levels 48.70 and 50.20.

 

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