Oil prices fell on Monday due to concerns about a drop in demand and uncertainty surrounding OPEC+ supply cuts. This decline follows a 2% drop last week after OPEC+ announced voluntary production cuts while traders are skeptical about the impact of these cuts and uncertain about how they will be measured. Global manufacturing activity remains weak, and there are mixed signs about the strength of China's economy. Additionally, Western countries are stepping up effort to enforce the $60 per barrel price cap on seaborne shipments of Russian oil in response to the conflict in Ukraine.
‘There are a lot of events happening at the same time that have a rather direct impact on the price of oil. Conflict in the Middle East, war in Ukraine, delayed meeting of the OPEC+, possibility of extension of the voluntary cuts by Saudi Arabia, major data coming up regarding the US Dollar this week therefore trading the “black gold” these days should be done with an extra layer of caution and risk management rules. ’ said Antreas Themistokleous, market analyst at Exness.
On the technical point of view the price has been trading in a bearish trend since mid October and is currently testing the support level of the lower band of the Bollinger bands as well as the 78.6% of the weekly Fibonacci retracement level. The moving averages are also confirming the overall bearish momentum since the faster one (50 days moving average) is trading below the slower one (100 days moving average)
On the other hand the area of $72.30 is the technical support level that could potentially push the price to the upside in the coming sessions and this scenario might also be supported by the oversold Stochastic oscillator as well.
‘There are a lot of events happening at the same time that have a rather direct impact on the price of oil. Conflict in the Middle East, war in Ukraine, delayed meeting of the OPEC+, possibility of extension of the voluntary cuts by Saudi Arabia, major data coming up regarding the US Dollar this week therefore trading the “black gold” these days should be done with an extra layer of caution and risk management rules. ’ said Antreas Themistokleous, market analyst at Exness.
On the technical point of view the price has been trading in a bearish trend since mid October and is currently testing the support level of the lower band of the Bollinger bands as well as the 78.6% of the weekly Fibonacci retracement level. The moving averages are also confirming the overall bearish momentum since the faster one (50 days moving average) is trading below the slower one (100 days moving average)
On the other hand the area of $72.30 is the technical support level that could potentially push the price to the upside in the coming sessions and this scenario might also be supported by the oversold Stochastic oscillator as well.