Oil prices made some upside attempts on Monday, driven higher by fears about supply disruptions amid unrest in Libya. 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, 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 and data due to be released on Wednesday and Thursday, respectively, due to yesterday’s public holiday in the United States.
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