The oil price was hit by the risk-off seen on markets in the last 36 hours. Growing fears about the new UK variant of the coronavirus generated a sell-off on both European stocks and oil. For WTI we have a quite significant support zone between $46.50 and $47 per barrel, which triggered a quick rebound yesterday afternoon, before being tested again this morning. So far, yesterday’s low has not been challenged and this could be seen as a signal of the price attempting to stabilize, even if oil is still in red again this morning.
The next few trading sessions will be crucial in understanding if the bullish trend of the last six weeks is just taking a break or if the recent declines are the start of a major pause. For the time being, despite the 5% decline from the peak of last week, we are still in a long-term positive scenario. However, this could change if investors continue to worsen their outlook on oil demand for 2021 due to COVID-19.
Chief analyst at ActivTrades and technical analyst for Italian newspaper 'La Stampa'. Carlo Alberto provides regular commentary for UK outlets including the BBC, Telegraph, the Independent Bloomberg & Reuters. He is also a weekly commentator for CNBC Italy and a columnist for La Stampa. He worked for Bloomberg as their Equity Research Fundamental Analyst before joining brokerage ActivTrades in 2011 to specialize in currency markets and commodities. In 2014 he published a 250-pages book on gold and the gold market, followed in 2018 by a new updated edition.
© 2019 High Leverage FX - All Rights Reserved.
© 2019 High Leverage FX - All Rights Reserved.