Crude Oil Daily Forecast – Crude Limping After ‘Black Monday’ Carnage

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Updated: Mar 17, 2020, 15:22 UTC

Crude oil has taken a breather on Tuesday, after sustaining sharp losses at the start of the week. The markets did not respond well to an emergency rate cut by the Fed, so crude prices could continue to slide.

Crude Oil Daily Forecast – Crude Limping After ‘Black Monday’ Carnage

Crude prices have posted sharp losses at the start of the week. Currently, U.S. crude oil is trading at $28.71, down $0.17 or 0.55% on the day. Brent crude oil is trading at $29.58, down $0.17 or 0.71%.

Crude Slides as Market Turmoil Continues

The week started on a disastrous note, as the ‘Black Market’ meltdown was the stock market’s worst one-day performance since 1987. The Dow Jones Index plunged close to 3000 points on Monday and crude prices declined by 13.1% in the financial carnage.

Crude has slumped by an astounding 36.1% in the month of March, as prices have been choked by a ‘triple whammy’. First, jittery investors have dumped all classes of assets and snapped up the U.S. dollar. Second, economies around the world buckling under the COV-19 crisis, which has dampened the demand for crude. China, the world’s second-largest consumer of oil after the U.S., has seen demand for crude shrink by more 20 percent. Third, the price war between Russia and Saudi Arabia has flooded the market with even more oil. The 3-year old agreement between OPEC and Russia fell apart earlier in March, when Russia refused to go along with deep cuts proposed by OPEC in an attempt to stabilize prices. Saudi Arabia responded by raising output and lowering prices, which has resulted in a huge oversupply of crude on the global markets. With no end in sight to any of these three factors, traders can expect oil prices to remain under heavy downward pressure.

Technical Analysis

The line of 29.85 is the next resistance line. However, it remains vulnerable to profit-taking, following crude’s sharp decline on Monday. This is followed by resistance at 32.80. On the downside, there is weak support at 28.20, protecting the round number of 28.00. This is followed by support at 26.80.

U.S. Crude 1-Day Chart

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.