Crude Oil Daily Forecast – Showdown Between OPEC, Russia as Crude Slide Continues

Crude continues to lose ground, with considerable losses on Friday. Currently, U.S. crude oil is trading at $43.83, down $2.09 or 4.57% on the day. Brent crude oil is trading at $47.72, down $2.28 or 4.56%.

Crude Slides to 15-Month Low

The markets are keeping close tabs on a key meeting in Vienna, as oil ministers from OPEC and non-OPEC countries are meeting on Friday. OPEC has publicly called for participants at the meeting to agree to a cut of 1.5 million barrels per day (bdp), but Russia is yet to commit to the proposal. Russia has said that the Russian budget takes into account lower oil prices. Without Russia on board, will OPEC go ahead with a sharp cut in output? If OPEC doesn’t make a move, there is talk of oil prices sliding as low as $30 a barrel.

Even if an agreement is reached in Vienna, a cut may not be enough to stabilize prices. “As global stocks increase by the day, the ongoing OPEC+ meeting is unlikely to result in cuts sufficient enough to balance the market, under all of our scenarios,” Rystad Energy said in a report.

Meanwhile, crude continues to drop to lower levels. On Friday, U.S. crude touched a daily low of $43.19, its lowest level since December 2018.  The coronavirus has now claimed fatalities in the United States, and the economic damage to the world’s largest economy and number one consumer of oil, is likely to worsen over the coming weeks.

Technical Analysis

Crude continues to break below support levels. On Friday, crude tested support at 43.55. Below, we find support at 41.50, followed by the symbolic 40.00 level. On the upside, there is resistance at 45.92, followed by resistance lines at 47.50 and 49.50.