Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Oil Prices Drift Lower Amid Risk Aversion

Published 01/21/2020, 01:15 PM
Updated 07/09/2023, 06:31 AM

Oil prices made some upside attempts on Monday, driven higher by fears about supply disruptions amid unrest in Libya. Brent climbed to $65.70 but failed to stay elevated and slipped back to $65. On Tuesday, the futures extended losses and have encountered a local support around $64, marginally above the 200-DMA.

The recent decline was due to a massive risk aversion fueled by a rising concerns over the outbreak of coronavirus, a new disease which causes pneumonia-like symptoms. Also, investor sentiment has deteriorated substantially after Moody’s downgraded Hong Kong’s credit rating, citing the government’s failure to deal with a long-standing social unrest.

As a result, Brent has lost its modest upside impetus and turned negative, both in the daily and weekly charts. In the short term, the prices will likely remain under pressure, with downside risks prevailing as long as the futures remain below the $66 handle. In the short term, Brent needs to get above at least the $65 figure which serves as the immediate resistance again. On the data front, the API and EIA data due to be released on Wednesday and Thursday, respectively, due to yesterday’s public holiday in the United States.

Latest comments

Thanks for the article
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.