Crude Daily Forecast – Crude Rally Stalls After Bland G-7 Statement on Coronavirus

Crude is trading sideways on Tuesday, after starting the week with sharp gains. Currently, U.S. crude oil is trading at $47.70, up $0.31 or 0.66% on the day. Brent crude oil is trading at $52.92, up $0.16 or 0.15%.

G-7 Statement Disappoints, OPEC Next

The week started with a surge in crude, as oil prices jumped 4.9% on Monday. This was the best one-day gain since mid-September, when crude soared after the Iranian missile attack on Saudi oil refineries. There were two reasons for the jump in oil prices. First, the G-7 industrialized nations announced that they would work in concert to combat the economic damage caused by the coronavirus outbreak. Second, there is anticipation that the OPEC+ meeting later this week will result in an agreement to cut production and stabilize prices.

The impressive rally by crude on Monday fizzled on Tuesday, as the G-7 meeting statement disappointed the markets. On Monday, French Finance Minister Bruno Le Maire has promised “concerted action” by the G-7. However, the statement failed to specify any concrete moves to combat the outbreak. Instead, the G-7 release said that members were committed to “use all appropriate policy tools to achieve strong, sustainable growth and safeguard against downside risks.”

Meanwhile, market focus has shifted to Vienna, where oil ministers from OPEC and non-OPEC countries will gather for a key meeting on March 5 and 6. All eyes are on Russia, which said earlier this week that it did not have a problem with current prices. However, with some analysts projecting that oil could fall below $30 a barrel, Moscow may decide to back OPEC’s proposal to cut production.

Technical Analysis

The line of 47.50 is under strong pressure in support. Below, we have support at 45.92, followed by support at 43.55. On the upside, there is resistance at 49.50, which is protecting the symbolic 50.00 level. Above, there is resistance at 51.50.