Crude Oil Price in Danger of $5 Drop If…Goldman Sachs
Goldman Sachs predicts a $5 drop in crude oil prices if the OPEC + meeting does not produce an extension of production curbs in its crucial meeting this week. Analysts at Goldman Sachs believe that this could only delay the oil market’s rebalancing as the expectations of a rollout of new coronavirus vaccines by Q1 2021 remain intact.
An extension of production curbs by the OPEC + alliance had looked inevitable, but new reports indicate that not all the alliance members, including Russia, are entirely on board. Libya’s ceasefire has allowed the country to ramp up production.
The outlook for crude oil price by Goldman Sachs touched off some selling on the Brent benchmark, tipping it 0.6% lower at writing.
Technical Levels to Watch
Friday’s lower close at the 48.33 resistance level set up the bearish engulfing candlestick pattern. Today’s bearish move lacks conviction and needs to close lower than Friday’s daily candle to post an outside day candle that could allow Brent crude to match the outlook by Goldman Sachs. This could lead to a slide towards 46.41, with 44.16 and 42.50 lining up as additional downside targets.
If the OPEC + production curbs are extended, this could be bullish for crude oil price, and we could see a push towards 50.64 if the resistance at 48.33 is overcome.