International-benchmark Brent crude oil futures closed lower on Friday after Russia said it needed more time to decide whether to join any additional oil output cuts by OPEC, saying U.S. crude production growth would slow and global demand remained solid, according to Reuters.
Russian Energy Minister Alexander Novak was speaking as OPEC pushes Moscow to make a decision on whether to cut output more in response to the coronavirus outbreak that has hit the global economy.
On Friday, April Brent crude oil settled at $54.47, down $0.46 or -0.84%.
Producers in OPEC+ are scheduled to meet in Vienna on March 5-6, although the meeting could be brought forward depending on how the coronavirus outbreak affects oil prices.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through $53.69 will reaffirm the downtrend with the next target the December 24, 2018 main bottom at $52.78. Taking out this level will essentially mean that last year’s entire rally has been wiped out.
The minor trend is also down. A trade through $56.56 will change the minor trend to up. This will also shift momentum to the upside.
The minor range is $53.69 to $56.56. Its 50% level or pivot at $55.13 is controlling the minor direction of the market.
Daily Swing Chart Technical Forecast
Based on Friday’s price action and the close at $54.47, the direction of the April Brent crude oil market on Monday is likely to be determined by trader reaction to the pivot at $55.13.
A sustained move under $55.13 will indicate the presence of sellers. The first downside target is the main bottom at $53.69. This is followed closely by the December 24, 2018 main bottom at $52.78. Taking out this level could spike the market into the May 4, 2017 main bottom at $50.56.
The main bottom at $50.56 is a potential trigger point for an acceleration to the downside with the January 20, 2016 main bottom at $45.60 a potential downside target.
Overcoming and sustaining a rally over the pivot at $55.13 will signal the presence of buyers. If this creates enough upside momentum then look for the rally to possibly extend into the minor top at $56.56.
Taking out $56.56 will change momentum to the upside. This could lead to a test of the Fibonacci level at $58.73.
We could see a sideways to lower trade until Russia makes its decision about making larger production cuts along with OPEC and its other allies. If Russia decides not to cut production, prices could plummet.
This article was originally posted on FX Empire
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