Crude oil price on the Brent benchmark is starting to pick up after yesterday’s huge slide.
On Thursday, demand concerns following another round of huge coronavirus infections in Europe, with accompanying lockdowns and restrictions in France, triggered a new round of selling on the Brent crude benchmark.
Supply delays of the coronavirus vaccines in the UK and the halt of vaccinations in several EU countries sparked fears that demand for crude oil would suffer in 2021 and beyond. An International Energy Agency (IEA) report that detailed a projected drop in crude oil demand in 2021 and 2022 was released earlier in the week, further adding to selling pressure.
This Friday, France, and Germany have announced they would resume the vaccinations with the AstraZeneca vaccine. However, gains on Brent crude oil price appear limited, as rising 10-year Treasury yields also add to a list of negative fundamentals for the black gold.
Technical Outlook for Crude Oil Price
Today’s 2.39% rise in Brent crude has met resistance at the 64.26 price level. Compressed by a rising support trendline, crude oil price is in for a squeeze and could either break the 64.26 resistance or could take out the rising trendline with the risk of a further huge selloff.
A breakdown of the trendline immediately pressurizes 62.21, with 60.07 acting as the next downside target if 62.21 fails to hold up prices. 57.47 and 56.47 have become more relevant with the price decline as potential downside targets, and they could be in line for the bears if 60.07 is taken out.
On the other hand, a break above 64.26 brings in new targets at 65.95 and 66.81, with 67.74 and 70.01 serving as additional targets to the north if crude oil prices can leverage on today’s gains to gain more ground next week.
Crude Oil Price (Brent); Daily Chart