oil prices
Crude oil price on the Brent benchmark is up 0.05% on the day after Russian oil company Gazprom NEFT confirms it has reduced production to comply with the OPEC + imposed output cuts.
Brent crude had been trading lower on the day, touching off the $37.26 price level after fears of a renewed wave of new coronavirus infections dampened risky sentiment and pressurized crude oil prices. A spike in infections in countries that had relaxed the lockdown rules such as China and the US spooked investors to induce a small selloff as the week started. But the news from Russia’s third-largest oil producer about a 19% cut in its oil output in compliance with the OPEC + stipulations helped stem the selloff, but not by much. The reductions by Gazprom were selectively implemented and did not affect its oil fields in Iraq.
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Crude oil price continues to be driven by fundamentals around the OPEC + agreement and the coronavirus pandemic in the short-term, with demand and price outlook from oil majors, OPEC and the IEA continuing to wield medium-term and long-term influence.
Price presently hovers around the 38.56 price level. With the candle’s low placed above this price, it functions as a support. If price can bounce off this support, then we could see a push towards 41.43. An attempt to cover the price gap of March 9 only follows a successful break of 41.43 and 44.16, and this action would allow Brent crude to aim for 48.33.
On the flip side, further dampening of risky sentiment could force Brent crude below 38.56, targeting the 35.61 support in the first instance. 31.69 and 28.38 remain viable downside targets if a major selloff resumes.