Crude oil prices on all significant benchmarks extended the slump on Thursday following new coronavirus lockdowns in the EU. The selloff has intensified this Thursday after US crude inventories data showed an addition of 4.3 million barrels to the stockpiles after stocks had dwindled by 1.0 million barrels the week before.
The resumption of crude oil production in Libya has also exacerbated supply concerns in the crude oil market, following the declaration of a permanent ceasefire by all conflicting parties in that country’s 9-year conflict. As new lockdowns are to take effect in France and Germany, the risk of dwindling demand as was the case when the coronavirus pandemic swept across the world in the 1st quarter of 2020 has depressed sentiment on the asset, hence the selloff.
Technical Outlook for Crude Oil Price
Price action on the Brent crude benchmark has broken below the channel, aiming for the support at 36.40. Further selling which breaks down this support area brings 33.83 into the picture.
On the flip side, improvement in risk sentiment allows a transient recovery in crude oil prices, which may allow 39.57 to come into the picture, with 41.43 remaining a close but presently elusive target for buyers.
Brent Crude Daily Chart