Any hopes of the extension of Wednesday’s recovery move on crude oil prices were dashed this Thursday after Brent crude sold off by 4.29% following renewed demand concerns.
Not even the grounding of a ship in the Suez Canal, a vital international crude oil shipping artery, was able to stop the decline in crude oil prices as the 3rd wave of coronavirus infections and accompanying restrictions revved up demand worries. This shows the extent to which traders have been spooked, as not even the cessation of all traffic across the Suez canal (which should have exerted a bullish influence) was enough to dissuade sellers from shorting the asset.
Traders will be looking towards the April 1 meeting of the OPEC + alliance for further direction on the pair.
Technical Levels to Watch
As predicted in my outlook piece of yesterday, one side of the outlook equation eventually held sway, as bears found the rejection at the 64.26 support and the rising trendline a tempting area to initiate new rally selling. This decline has violated the 62.21 support and looks set to target the 60.07 price level. A further decline below this area takes crude oil prices on the Brent benchmark to 7-week lows at 57.47.
On the other hand, a bounce at the 60.07 price level allows bulls to retest the 62.21 pitstop, with 64.26, 65.95 and 66.81 all within the horizon as possible target price levels for bulls aiming to generate a resurgence in crude oil prices. The recovery uptrend is starting to look distant, but comes straight back into play if the 8 March 2021 high is breached; a move that also takes out 67.74.
Crude Oil Price (Brent) Daily Chart