Crude oil price has begun the week on a decline as uncertainties over the impact of Omicron on global oil demand persist. Rising COVID-19 cases in the US and Europe have investors worried about impending restrictions ahead of the festivities.
In particular, the Netherlands imposed a nationwide lockdown on Sunday. Subsequently, there are concerns that other European countries will follow a similar route. However, Goldman Sachs and other analysts have maintained that the market is overreacting.
Crude oil price prediction
Brent futures have been trading within a horizontal channel for two weeks after dropping to its lowest level since late August earlier in the month. However, earlier in Monday’s session, the benchmark for global oil has declined past the channel’s lower border.
At the time of writing, it was down by 1.55% at 71.83. On a four-hour chart, crude oil price is trading below the 25 and 50-day exponential moving averages. It is also below the long-term 200-day EMA.
Based on the fundamentals and technicals, I expect heightened volatility in the new week. Granted, the range between last week’s low of 72.52 and the 200-day EMA at 76.84 will remain a crucial one for crude oil price. Indeed, I expect it to find support along 71.50 and bounce back to the aforementioned channel.
Below the current support zone, the psychological level of 70 will be one to look out for. On the flip side, a move above the range’s upper border will likely place the resistance level along the 200-day EMA at 76.84.