U.S. Continuous Drilling Activity Weighs on Oil Prices
Dave Green • 2 min read
As we mentioned yesterday, Oil will suffer losses amid continuous U.S. drilling activity taking pace. Moreover, drilling started to weigh on the oil prices nd offset solid efforts by OPEC-Non-OPEC members to curb the output based on the strategy to increase market price. Additionally, the Lunar New Year long holidays stalled the Chinese economy to some extent, lowering demand of importing crude oil.
As the market proceeds in the coming months, oil production data is expected to be released by OPEC and Non-OPEC members in accordance with the agreement to reduce output. It will be a game changer for the oil market, and the impact will be wider on investors to clear the shadows of doubt over production cuts.
Crude Oil dropped below yesterday’s lows of 53.40 and it might hit down today within the range of $52. Investors have eyes on U.S. Crude oil inventories as they are expected to produce solid direction tomorrow.
Brent crude dropped to yesterday’s low of $54.90 but recovered early losses and marks the high of $55.35, before the start of European session.
Since the start of the New Year, Brent has lost over 5.5 percent in value.
Let’s have a look at the Crude Oil daily chart given below:
This is the Crude Oil daily chart.
Technically, it’s a decisive week for commodities; especially crude oil in order to sustain the level of $51.80 – $52. Today is the last day of January, and the monthly closing is going to happen. It can put extra pressure on oil to suffer more losses. If oil gives a closing below $51.80 – $52 today, downward channels will open and we might have to go short but we will need to decide that later today. I will post the entry level but I need patience and confirmation of opening of downward channel.