Commodities

Crude Oil Price Prediction Amid Persistent Concerns Over Omicron

Published by
Written By: Faith Maina
Share
    Summary:
  • Crude oil price has begun the week in the red amid the persistent concerns over the impact of Omicron on global oil demand.

Crude oil price has begun the week on a decline as uncertainties over the impact of Omicron on global oil demand persist. Rising COVID-19 cases in the US and Europe have investors worried about impending restrictions ahead of the festivities.

In particular, the Netherlands imposed a nationwide lockdown on Sunday. Subsequently, there are concerns that other European countries will follow a similar route. However, Goldman Sachs and other analysts have maintained that the market is overreacting.    

Crude oil price prediction

Brent futures have been trading within a horizontal channel for two weeks after dropping to its lowest level since late August earlier in the month. However, earlier in Monday’s session, the benchmark for global oil has declined past the channel’s lower border.

At the time of writing, it was down by 1.55% at 71.83. On a four-hour chart, crude oil price is trading below the 25 and 50-day exponential moving averages. It is also below the long-term 200-day EMA.

Based on the fundamentals and technicals, I expect heightened volatility in the new week. Granted, the range between last week’s low of 72.52 and the 200-day EMA at 76.84 will remain a crucial one for crude oil price. Indeed, I expect it to find support along 71.50 and bounce back to the aforementioned channel.

Below the current support zone, the psychological level of 70 will be one to look out for. On the flip side, a move above the range’s upper border will likely place the resistance level along the 200-day EMA at 76.84.

crude oil price

This post was last modified on Dec 20, 2021, 02:50 GMT 02:50

Written By: Faith Maina

Faith Maina is a financial analyst and economist. She holds a Bachelor’s Degree in Economics and is underway in her Master’s degree course. She has an expansive understanding of global markets and their drivers. Her specialities are currencies, crypto, commodities, and equities. She lives in Nairobi, Kenya with her husband and son.

Published by
Written By: Faith Maina