On Thursday, the price of crude oil Brent significantly declined. Compared to the opening price, oil has lost over 150 points. Futures of Brent at ICE Futures have dropped in price by 2.8% up to $62.03 per barrel. At the Asian session the price continues to decline and at the moment Brent is traded at the level of 61.00–62.00.
Today, OPEC meeting in Vienna has begun amid the increase of oil production in the whole world. At the time when the largest oil suppliers like Iraq, Russia and Saudi Arabia are increasing oil production and export and Iran can also start the increase of oil production after the lifting of sanctions, it is unlikely that OPEC will reduce quotes and production levels.
If the decision to increase oil production will be adopted, it is possible that the price of oil will collapse in the short-term; on the other hand, the decline can also become a tendency.
The data on the US NFPR, which will be released today at 15:30 (GMT+3) can affect the market. If the forecast of 225 000 new jobs proves to be correct, the USD will strengthen against all the instruments, including oil.
Support and resistance
The price has broken down support level of 62.80 (Fibonacci 23.6%), and the line of the ascending corrective channel (62.00).On the four-hour chart the indicators OsMA and Stochastic are in the sell zone.
Support levels: 53.00, 55.00, 59.00 and 60.00.
Resistance levels: 62.80, 65.70, 66.40, 70.00 and 72.70.
It is recommended to open short positions at the current price and from the levels of 62.80, 64.00, 65.70, 66.40 and 67.80 with the targets of 61.20, 60.00 and 59.00. If downtrend continues, the targets will shift to the levels of 55.00, 53.00 and 47.00.
Alternative scenario is possible if the price breaks down resistance level of 66.40 (ЕМА144) with the targets 67.80, 70.00 (ЕМА200) and 72.70 (Fibonacci 38.2%).