Crude oil price managed to rebound from yesterday’s heavy loses amid signs of improvement in investors sentiment after government interventions that inject liquidity into markets.
The Federal Reserve announced $1.5 trillion in new repo operations. PBOC proceed with a targeted RRR cut of 50bp-100bp for banks qualified in “inclusive finance” tests, which will release liquidity of about RMB 400bn, while ECB kept interest rates but extended the lending scheme to support SME.
As there are no signs of de-escalation in the crude oil price war between Russia and Saudi Arabia, I expect the volatility in the crude oil price to persist. Meanwhile, US Treasury Secretary Mnuchin said that the supply chain issues is not a major problem at the moment.
Read our Best Trading Ideas for 2020.
Crude Oil Price Analysis
The crude oil price is 3.37% higher at $32.58 as the rebound from the lowest price since 2016 that hit on Monday continues amid increased volatility. The technical outlook is bearish for the short term, but as the crude oil price is in oversold level, a sharp rebound can’t be ruled out.
On the upside, crude oil price first resistance stands at $33.87 the daily high. If the oil price breaks above, the next obstacle will be met at $36.40 the high from March 11th. The next supply zone will be reached at 41.32 the low from March 6th trading session, which will also close the recent gap down.
On the flip side, the initial support level is the daily low at $30.33. Next critical support will be met at 30.04 the low from yesterday’s trading session. Next support zone stands at 27.74 the low from March 9th.