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24 Mar 2016
Brent oil dips below $40 on concerns of oversupply
Brent prices extended losses in the European session to trade below $40.00/barrel after the US weekly inventory data brought oversupply fears back in the limelight.
Futures currently trade around $39.80 levels; down 1.56% on the day. Oil benchmarks took a hit yesterday after IEA’s Atkinson called Saudi-Russia output freeze meaningless. Furthermore, data in the US showed a sharp rise in the weekly inventory number.
The combined effect convinced markets that production freeze may not be able to cure the supply-demand mismatch.
Brent Technical Levels
The immediate support is seen at $39.00 (zero figure + falling trend line support), under which prices could drop to $37.86 (100-DMA). On the other hand, a move back above $40 handle would expose hurdle at $41 (Mar 11 high).
Futures currently trade around $39.80 levels; down 1.56% on the day. Oil benchmarks took a hit yesterday after IEA’s Atkinson called Saudi-Russia output freeze meaningless. Furthermore, data in the US showed a sharp rise in the weekly inventory number.
The combined effect convinced markets that production freeze may not be able to cure the supply-demand mismatch.
Brent Technical Levels
The immediate support is seen at $39.00 (zero figure + falling trend line support), under which prices could drop to $37.86 (100-DMA). On the other hand, a move back above $40 handle would expose hurdle at $41 (Mar 11 high).