Crude Oil Price Hits Eight-Month Lows on Demand Fears
Crude oil price is 0.13% lower at $51.46 amid demand fears due to the coronavirus outbreak. The U.S. issued a travel warning to China. The World Health Organization (WHO) the previous week declared a global emergency as the coronavirus spread to 24 countries. Meanwhile the Philippines reported during the weekend the first coronavirus death outside of China. Now there are more than 17,300 confirmed coronavirus cases in 24 countries, and the death toll has reached 361. OPEC+ scheduled a meeting on February 4 and 5 in Vienna to assess the impact of coronavirus spread on global crude oil demand and propose on whether to extend the oil supply beyond March or to implement deeper crude oil production cuts which can provide some support to prices.
The crude oil price rallied to eight-month highs after the Iranian missile attack in a U.S. base in Iraq. As the coronavirus outbreak came in the crude oil price dropped sharply to eight month lows amid demand concerns and lower growth expectations in China.
The crude oil price hit earlier today fresh eight-month lows at 50.42 as the Chinese markets reopened after Lunar New Year holiday. Crude oil have reached a deep oversold level amid growing concerns on the impact of coronavirus spread in the global economy. The technical outlook is clearly bearish but a rebound from oversold level might not be ruled followed by a short squeeze.
On the downside, immediate support for crude oil stands at $50.42 today’s low. Next support area will be met at $49.76 the low from January 9th 2019. A break below will enhance the selling pressure down to $48.63 the low from January 8th 2019.
On the upside, crude oil first resistance stands at $51.88 the daily top. If the crude oil price breaks the initial resistance, the next resistance will be met at $53.35 the high from January 31st. If we have a breakout the next resistance will be met at 54.36 the high from January 29th.