Crude oil price on the Brent crude benchmark halted its 7-day advance late yesterday, as concerns over new coronavirus variants started to weigh on the market. Also adding to the depression of price this Thursday was the report from the International Energy Agency, hinting that the global oil supply was still outstripping demand.
The Organization of the Petroleum Exporting Countries on Thursday cut its forecast for a demand rebound in 2021. The cartel said in its monthly report that demand would only rise by 5.8 million barrels per day, as opposed to the earlier 5.9 million barrels per day predicted in January. Demand dropped by 9.7 million barrels per day in 2020 as the coronavirus pandemic caused industrial users of oil derivatives to shut down factories and production plants.
Meanwhile, the virulent Kent coronavirus strain has been projected to “sweep the world”, according to top UK scientist Professor Sharon Peacock. The mutant strain has already been identified in 50 countries and is said to spread faster than the original Wuhan strain. Peacock, Prof Peacock, who heads the Covid-19 Genomics UK consortium, said that it could 10 years to fight off the coronavirus.
Crude oil price is up 0.23% but is yet to reclaim yesterday’s highs.
Technical Levels to Watch
Yesterday’s doji candle and today’s bull candle that falls short of yesterday’s highs on the daily chart indicate that further upside may have stalled. A lack of buying momentum could cause a pullback that tests the 60.07 support. A breakdown of this support brings in 57.47 into the picture, with 56.47 also serving as an initial downside target.
On the flip side, greater buying momentum is needed to take the current candle (or subsequent ones) above yesterday’s high of 61.68. This may then open the pathway towards 62.21, with 64.26 forming an additional target to the north.
Brent Crude Daily Chart