Crude Oil Price Pairs Gains After Two Coronavirus Cases Confirmed in UK
Crude oil price gives up early gains and it is marginally on the positive territory after reports of two confirmed coronavirus cases in the UK. Two members of the same family are confirmed to have tested positive for coronavirus. The cases are members of the same family and are receiving special NHS care to avoid spreading.
Early optimism in oil markets cancelled after the coronavirus news in the UK. The situation in the global transportation getting nasty as more and more airlines are entirely stopping their flights from and to China. And the aeroplanes that fly are only 10%-20% full. Above that if we add a sharp decline in transportation within China, the drop in crude oil demand looks extremely negative for the crude oil price.
Oil prices recovered after the World Health Organisation yesterday came in declaring global emergency over the coronavirus outbreak.
The crude oil price is 0.52% higher at $52.38 as the price attempts to recover yesterday’s sharp losses. Crude oil is under severe selling pressure and reached oversold levels as the coronavirus spread in China and in other countries. The RSI (14) index have reached extreme oversold levels at 25.91. Traders might limit the exposure as we are heading to the weekend.
On the upside, crude prices initial resistance stands at $53.36 the daily high. If the crude oil breaches the initial resistance, the next hurdle will be met at $54.33 the high from January 29th. If we have a breakout the next resistance will be met at 55.91 the high from January 24th.
On the flip side, first support for crude oil price stands at $52.16 today’s low. Next support area will be met at $51.60 the low from yesterday’s trading session. A convincing break below would result in a deeper move down to $51.98 the low from October 3rd.