ENERGY MARKET REMAINS UNDER DEMAND FEARS

After registering the new high at 65$ handle in January 2020, the oil market has been doing nothing but melting down. In two months, it has dropped 30% of value clearing last year’s gains and getting back to January 2019 price level. The fears about the impact on the global demand caused by the lockdown of one of the biggest economies and latest headlines about a major concern regarding the spread and presence of the Covid-19 in other latitudes has reignited the fears of a global scale slowdown.

Technically speaking, price action is currently free falling. From a broader look today’s chart, on the weekly reign, the oil price could be heading straight to 42$ handle as strong support level previously tested in December 2018 and June 2017. With the last line of defense being the uptrending (black) trendline. MACD shows an intense bearish pressure with an oversold Stochastic signaling a possible price correction.

Crude oil market remains skeptical and within mixed signals, when in one side OPEC+ seem reluctant to increase the production cut, with Russia seeing not much sense in the impact on demand, and the other hand, the International Energy Agency affirming in London this week that the oil demand forecast is at its lowest in a decade.

Either way, next week would bring clear direction into the energy market with the meeting in Vienna, assuming it won’t be too late for damage control, let’s stay tuned and happy weekend ahead. See you next Friday, and be the market remain with you all.