- Summary:
- Crude oil price falls on the day and inches closer to the bearish flag's lower border as OPEC lowered its forecasts for global demand growth.
The Organization of the Petroleum Exporting Countries (OPEC) has, in its latest report, left its projections for world oil demand growth in 2021 unchanged at 5.95 million barrels per day (bpd).
As quoted by Reuters, this represents a reduction of demand forecast for Q2 2021 by 300,000 barrels per day. It specifically cited India as facing the possibility of economic contraction in Q2.
The report also reduced forecasts for supply growth from non-OPEC sources to 700,000 barrels per day. This represents a drop of 230,000 bpd.
OPEC raised forecasts for Q3 and Q4 2021 as its oil output climbed to 25.08 million bpd on the back of improved Iran supply. OPEC sees total demand for 2021 growing by 200,000 barrels per day to 27.7 million barrels per day.
Crude oil prices on the Brent benchmark fell 1.35% on the report.
Technical Levels to Watch
Today’s decline and intraday violation of the 67.74 support line puts this level at great risk. A successful breakdown here opens the door towards 66.81, the last standing support before the bearish flag’s lower border is put to the test. If this flag gives way, we could see further downside that targets the 60.07 support level as the measured move’s projected completion point. This move needs to take out 65.95, 64.26, and 62.21 to be actualized.
On the flip side, a bounce on the 67.74 support or the 66.81 price level allows the bulls to ask questions of 70.01 mark, with 71.44 being the resistance on which the flag’s upper border lies. Clearance of this area opens the way towards 73.34 and negates the bearish flag. Ascent to any of these resistance levels could also be rally points on which cheaper sell trades may occur.
Crude Oil Price Daily Chart
