Everybody is talking about the EUR and here we have the Oil loosing ground

The big story at the moment is the French Elections but there is another hero of the day, which unfortunately is not getting enough attention – Oil. Last week was terrible here. Especially Friday, which finished with the fresh lows and complete defeat of the long side of the market.

For the last few months we are bearish on the Oil. Our arguments all the time stay the same. First of all, the global demand is weak and there is more than enough data to support that. Furthermore, recent gains were driven on false expectations about extending the OPEC agreement. In addition to that, every cut in production in OPEC countries is covered by other producers. You just cannot argue with the big picture here.

Those are fundamentals, which remain a strong selling point. What about technical analysis? Last week we managed to break three crucial supports. This week we already used the closest one as a resistance and that bounce led us to the new lows. That, by all means, is negative.

Now it is time for the OPEC jawboning, more cuts, extended cuts, more commitment etc… we all heard that before. The closest support is on the 47.2 USD/bbl and with the recent capitulation in the buyers camp, we should have no problems to get there in the next few weeks.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis