Crude oil prices fell sharply to trade below $29 after showing a slight bullish recovery during the previous week. Crude oil prices benefited from President Trump’s saying that his government is to buy large quantities of crude oil for the Strategic Petroleum Reserve to take advantage of lower oil prices. Nymex crude oil futures rose 2.8% to $31.87 a barrel, and Brent rebounded 4.3% to $34.07.
Over the weekend, the global coronavirus pandemic worsened, particularly in Europe. Italy saw the number of coronavirus cases surge past 24,700 (1809 deaths), while Spain reported over 7,800 cases in total, Germany over 5,800 cases and France over 5,400 cases. In the U.S., the number of cases jumped to nearly 3,600 (68 deaths).
The RBA indicated that it would purchase bonds while holding a special meeting on Thursday. Whereas, RBNZ finally also joined the role of major central bankers that offered major rate cuts in order to control the coronavirus (COVID-19).
China’s National Bureau of Statistics (NBS) said that China’s economy continues to stabilize despite the impact of coronavirus. The comments came after January-February month Retail Sales and Industrial Production disappointed markets. As in result, the risk-tone remains under pressure with the U.S. ten-year treasury yields decreased around 0.673% while stocks in Asia register mild losses due to pandemic fears.
Moving forward, traders will keep their eyes on central banker’s moves and announcements/surprises for near-term trade direction. On the other hand, coronavirus headlines will also be essential to watch.
Daily Support and Resistance
- S1 26.84
- S2 29.16
- S3 30.25
Pivot Point 31.49
- R1 32.57
- R2 33.81
- R3 36.13
On the technical front, crude oil has formed a bearish engulfing candle, which is strengthening the bearish bias among traders. On the lower side, the WTI prices may head further lower towards the support level of 27.33 level. Below this, the next support can be found around 23.95 level. Fundamentals are in favor of a selling trend, and but oil should break below 27.50 level before exhibiting further selling today. Let’s consider staying bearish below $31. Good luck!