Crude oil price resumed downtrend on Monday as recession fears rise amid the disruptions in the global economy. Crude oil price lost the previous week over 23%. US Federal Reserve slashed interest rates by 100 basis points to zero in an attempt to offset the coronavirus impact on the economy. Fed would also buy back $700 million of Treasurys and mortgage-backed securities.
Airlines and leisure companies continued to suffer today. Tui shares lost 28%, EasyJet is 26% lower, British Airways is 21%, and Air France drops 17.5%.
The depressed outlook for global demand and further disruptions in trade and travel amid the crude oil price war between Saudi Arabia & Russia might put further pressure to oil prices.
The crude oil price is 6.71% lower at $29.59 as the price pressured by the weak fundamentals and bearish technical outlook. The crude oil price has reached oversold levels and bulls bet on a relief rally.
On the downside, the initial support level is the daily low at $29.55. Next critical support will be met at 27.49 the low from March 9th. A break below might test the low from February 17, 2016, at 28.69.
On the upside, oil price first resistance stands at $33.75 the daily top. If the oil price breaks above, the next hurdle will be met at $36.23 the high from March 11. The next supply zone stands at 41.32 the low from March 6th trading session, which will also close the recent gap down.