Crude Oil Daily Forecast – Oil Prices Remain Under Pressure

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Updated: Mar 11, 2020, 17:17 GMT+00:00

Crude remains under pressure, as dramatic geopolitical crises are weighing on prices. Saudi Arabia and the UAE are engaged in an all-out price war with Russia, while the coronavirus outbreak is threatening to become a national health crisis in the United States.

Crude Oil Daily Forecast – Oil Prices Remain Under Pressure

Crude prices have lost ground in the Wednesday session. Currently, U.S. crude oil is trading at $33.36, down $1.61 or 4.03% on the day. Brent crude oil is trading at $36.16, down $1.64 or 4.29%.

Crude Volatility Continues

It has been a roller-coaster ride for crude. On Friday, prices fell by almost 10 percent, after OPEC failed to secure an agreement for a deep cut in output, in order to stabilize falling oil prices. This was followed by a staggering 27% decline on Monday, as the markets reacted to Saudi Arabia’s decision to launch an all-out price war against Russia. The move was in retaliation for Russia’s refusal to join forces with Saudi Arabia and cut production. This huge drop was apparently excessive, as crude bounced back on Tuesday, with gains of 15%. On Wednesday, the United Arab Emirates, OPEC’s third-largest oil producer, announced that it would follow Saudi Arabia’s lead and raise output, from 3 million to 4 million barrels per day, starting in April.

The immediate outlook for crude is not promising. The dramatic events of the last few days saw crude prices nosedive close to a low of $27.29 a barrel, its lowest level since February 2016. The coronavirus has led to authorities in Italy restricting movement throughout the entire country and the United States has now reported over 1,000 cases of the virus. The U.S. is the world’s largest consumer of oil, and it’s clear that as the virus takes a toll on the U.S. economy, demand for crude will fall.

Technical Analysis

The line of 32.80 is providing support but remains vulnerable. This is followed by support at 29.85. On the upside, we find resistance at 35.50. If crude breaks above this line, it has some room to gain ground, with the next resistance line at 38.80.

About the Author

Kenny Fisherauthor

Kenny is an experienced market analyst, with a focus on fundamental analysis. Kenny has over 15 years of experience across a broad range of markets and assets –forex, indices and commodities.