Crude oil prices fell by more than 3% on Monday after China applied more restrictions due to the spread of the delta variant of the coronavirus. China, the world’s largest crude oil importer, reported a rise in new cases, with further restrictions on travel being applied in 46 cities. Under the new limitations, flights are facing cancellations, and public transportation has been severely limited.
The new restrictions could fuel demand worries, already triggered as China reported a 20% drop in its crude oil imports in July, year-on-year. The crude oil price on the Brent crude benchmark fell to as low as $67.62 before a slight recovery to $68 as of writing.
Technical Outlook for Crude Oil Price
Crude oil price on the Brent benchmark broke below the redrawn trendline at 70.01 but has found support at the 67.74 price mark. A break below this area brings 66.81 into the picture, with 65.95 and 64.26 lining up as potential price support levels if crude oil prices continue the decline.
On the flip side, a bounce from 67.74 allows for a retest of the trendline at 70.01. If this level is uncapped, we could see a return to 71.44. Crude oil price can only set a new high for 2021 if the advance takes out 75.52 and 77.93.