Crude oil price started with a gap higher on news that President Trump is preparing a plan to reopen the economy sooner than expected. Oil price gets a boost from the agreement between OPEC and major producers including Russia, on production cuts of about 10 million barrels per day.
Global oil demand has collapsed amid the coronavirus outbreak and a price war between Russia and Saudi Arabia. OPEC lowered the forecast for 2020 global oil demand and warned for further revisions. OPEC now expects a contraction of global oil demand of 6.9 million barrels per day.
China’s economy shrank the most since at least 1992 in the first quarter. China’s economy contracted by 9.8% in the Q1, the yearly GDP reading contracted by 6.8%.
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Crude Oil Price Analysis
The crude oil price managed to break above the $25 per barrel mark exiting the oversold levels. The technical outlook remains bearish for the crude oil price despite today’s sharp gains. Only a close above $30 per barrel can cancel the bearish momentum.
On the upside, crude oil price initial resistance stands at $26.78 the daily high. If the oil price breaks above, the next resistance will be met at $28.32 the high from April 9 trading session. The next supply zone stands at 30.29 the high from March 17th trading session.
On the other side, the first support for crude oil is the daily low at $25.27. Next critical support will be met at 22.07 the low from April 13 trading session. The recent low at $19.13 is the next critical support.
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