WTI oil future contract for May accelerated lower in early Monday’s trading and hit the lowest since 1999 on over 16% fall during Asian / early European trading. The sentiment remains very weak and traders continue panic selling as demand weakens on daily basis and fears that US storage will fill soon. Weak global consumption over pandemic lockdown flooded markets with oil, with the latest decision of OPEC+ group to reduce daily production by 9.7 million bpd that will be effective from the beginning of May, having no positive impact on crashing oil prices. The contract fell to the lowest in 21 year at $14.20 zone in European trading on Monday, with next target at $10, coming in focus. Earlier comments that oil price can fall as low as $10 per barrel that would strongly hit all sectors in oil industry and likely be fatal for many oil refiners, are just step ahead of becoming reality. We predicted that oil price will be in a free-fall after break of critical $20 support zone and now witnessing the action. Some brief upticks can be expected meantime, more as positioning than any serious recovery attempts, however, oil is expected to face strong headwinds from $10 zone, where some basing attempts could be anticipated. Broken $20 zone marks the first significant resistance and only break here would provide temporary relief.
Res: 15.21, 16.66, 17.68, 18.88
Sup: 14.00, 13.14, 11.70, 10.00
