Brent crude oil price hovers around the $42 mark as the rising number of new infections in California, Texas and other states threaten the reopening process, that would also cancel the increasing demand for oil. Two counties in California announced that they would not reopen the schools and the classes will be taught online when schools open in August.
The crude oil price rallied as the OPEC+ countries decided to cut the oil production by 9.7 million barrels/day that is almost ten per cent of global production output until the end of July. From August the cuts would be up to 7.7 million barrels per day, until December. OPEC representatives will meet tomorrow to discuss the next level of cuts. OPEC now forecasts that 2020 global oil demand to shrink by 9.07 million bpd, a more profound drop than its previous forecast of 6.85 million bpd.
Oil price has stabilized the last two weeks between the 40 and 43 as investors await the next catalyst that will have a significant impact on the price.
Brent Crude Oil Technical Analysis
The Brent crude oil price is 0.43% higher at $42.43 looking trapped in a narrow trading range for the previous two weeks. The technical outlook for Brent oil is neutral for the short term despite and only a break above $43 or below $40 would signal the beginning of a new trend.
On the upside, crude oil price first resistance stands at $42.51 the daily top. If the crude oil price breaks above $42.51, the next obstacle will be met at $43.25 the high from yesterday’s trading session. Next supply zone for the Brent oil stands at $43.94 the high from June 23.
On the flip side, the initial support for Brent oil is at $41.78 the daily low. Next support for the crude oil price will be met at $41.25 the low from July 10 trading session. If the Brent oil breaks lower, the next support zone stands at $38.40 the 50-day moving average.
Brent Crude Oil Daily Chart