Over the course of this year, the oil prices weakened from the strong position it enjoyed early on, slipping to a sub-20 level. Since 22 April low, the price rallied more than 170% buy still 33% down from this year’s opening levels. In the first half of 2020, OPEC+ production cuts made a significant contribution to push the oil price above $40 per barrel.

Last week International Energy Agency published its latest oil market outlook, printed its quarterly forecast out to the end of 2021.

Highlights:

  • Oil demand in 2020 is expected to fall by 8.1 mb/d, the largest in history, before recovering by 5.7 mb/d in 2021.
  • Global oil output is set for a modest 1.7 mb/d recovery in 2021, assuming OPEC+ cuts ease.

Crude oil prices have begun the brand-new week on a positive note but failed to breach early June high.

Overnight Brent crude oil rose by 2.75% and settled at $42.89 levels. The price action is now pausing at the parallel resistance level located at $43.35, 08 June high.

The oversupplied oil continued its northward march from the third day in a row to close at around $43 levels. Before it moved to early-June high, the price action has developed an inverse H&S pattern on the H1 chart. The neckline is located at $40.00. Now a breakout of the $43.35 needed to initiate the next leg to $44.50 and $45.00 levels.

Support levels are located at $41.70, $40.00, and $37.00 levels.

It is important to always keep in mind the risks involved in trading with leveraged instruments.

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