- Summary:
- crude oil price are on a consolidation pattern after Tuesday's plunge. The rising coronavirus cases in Europe are a key driver.
Crude oil price is on a consolidation pattern after the plunge in Tuesday’s session. Brent futures dropped from $64.32 to around $60.39. This is its lowest price since mid-February. The third wave of the coronavirus, which has greatly hit Europe is one of the drivers of the fall. As a result, several countries in the region are either reinstating or prolonging lockdown measures.
Germany, France, Italy, and Netherlands are some of the nations whose governments have enacted the approach to deal with the new variant. Subsequently, the demand for oil and share price of travel firms and airlines has dwindled.
At the same time, the rise in US oil inventories has exerted pressure on crude oil price. According to the American Petroleum Institute, the weekly stockpiles rose by 2.927 million barrels compared to last week’s drop by 1 million barrels. The figure missed the estimates of a 900,000 barrels decline. Investors are now looking for the trend’s confirmation from EIA’s data later today.
Crude Oil Price Technical Outlook
Brent futures are trading below the 14 and 28-day exponential moving averages. At its current mark of 60.76, crude oil price is finding support at the prior support level of around 60.39. As such, it is likely to trade sideways for the better part of the day. A move below that point will prove that the prices are on a bearish reversal rather than a corrective pullback.
On the upper end, the benchmark of global oil is likely to experience resistance at 62.50. if the bulls manage to push the prices higher than this point, an uptrend will be evident, and the next target will be 65.
Brent Chart
