In the last few days, the technical scenario for oil has deteriorated sharply with WTI falling below $39 to its lowest level since June. There is now a first support zone just above $37, while at $35 there is a stronger support. This decline could open space for an increase in volatility after a relatively quiet few month. Hopes for a quick economic recovery remain intact but growing cases of Covid-19 remain a concerning factor.
Anyway, this does not seem to be the main market mover with investors more worried by Saudi Arabia’s price cuts. Furthermore, expectations regarding China buying much less oil in the upcoming months are another disruptive element from a fundamental perspective.
