Have oil prices touched the bottom?

Have oil prices touched the bottom?

Where are oil prices headed?

Crude oil prices are currently driven by the following:

  • Demand erosion caused by the coronavirus
  • Breakdown of OPEC+ agreements, coupled with the expectations of Russia and Saudi Arabia ramping up productions

Looking ahead, the oil markets are going to be volatile and will be more sentiment driven and moving on news events. Currently, the lows established 5 year ago are being tested. However this low price would attract some bargain hunting as such lows cannot be sustained by the oil industry. Once Russia and Saudi Arabia come to some sort of agreement and the spread of the coronavirus slows down, markets would rally.

Immediate Support and resistance points for Nymex WTI

  • Support at $27 a barrel then $20 a barrel
  • Resistance at $34 and $40 a barrel

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