Oil Decline Likely to Persist

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For the oil market, it is not just about the coronavirus hampering demand, but also about the tit for tat between Saudi Arabia and Russia.

Technically, crude oil shows room for a drop towards the $21-22 handle (see highlighted area above). This is based on the longer-term projection as the weekly chart indicates.

In the shorter term and as seen above, we are looking for a move back to the $27.15-20, with $28.25 as an initial resting point.

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The 30-minute chart indicates that prices have broken below a bear flag pattern. This breakout was confirmed with a retest and a failure t the $34 round resistance (see highlighted area).

This was followed by another bear flag and prices fell through to deeper levels. This is often seen when we notice consequent flag breakouts.

Out technical view favors additional weakness with the $30.35 looking to provide a short-term resistance. Provided of course a retracement takes place.

Otherwise, the next level on the downside is marking the $27.15-20 area, which looks like an interim target on the 30 minutes timeframe. The initial support could kick in around $28.25.

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