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Crude oil price drifting lower as Europe battles third wave

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Golden FX Link Capital business manager Chhea Chhayheng.

Crude oil price drifting lower as Europe battles third wave

Extended lockdowns as Europe battles a third wave of Covid-19 has since Monday started hurting the price of crude oil – forcing the commodity to trade at around $59.60 to $61 per barrel.

Leading industry analyst OilPrice.com has highlighted that extended lockdowns in Europe have prompted concerns about the demand for fuel in the coming weeks, while economic recovery could stall amid a further spread of the coronavirus.

Germany – Europe’s largest economy – is extending its lockdown until April 18, while Poland, at its worst point during the Covid-19 pandemic, has announced a two-week lockdown that will lead to the closure of nurseries, schools and salons, and even limit church activities.

Likewise, France has threatened to implement tougher measures to counter the third wave sweeping the continent.

These new measures could further dampen the consumption of energy and the demand for it in the Eurozone – which has already suffered a severe economic contraction since the outbreak began last year.

Another important event that could have further ramifications on the fuel market is the OPEC Joint Ministerial Monitoring Committee on April 1, where top producers will decide on production capacity.

The upcoming meeting has put traders on edge as they watch for signs that would give clues to OPEC’s strategy as the group tries to maintain an equilibrium in the market and prices at optimum levels.

For the technical part, we have noticed that the price of oil has been moving between $57.30 to $62 a barrel last month, with the daily average price movement around $3.20.

Oil prices are likely to consolidate at around $60 a barrel, and traders should place a sell position at $62 per barrel, putting the take-profit function at $60.80 and stop-loss function at $62.80 per barrel.

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