Crude has plunged about 20% from its 2020 peak on January 8 as oversupply concerns combined with worries about large scale fuel demand declines in China as the country’s quarantine procedures to fight the Coronavirus outbreak has stymied economic activity.
Venezuela is still a mess. An oil tanker caught in the crosshairs of the political battle for control of Venezuela is discharging its cargo after a year and two days bobbing off the South American country’s coast.
Libya is not much better. Nigeria is struggling with internal strife after its last election and a continuing push by separatist movements. Saudi Arabia is continuing its role as the big brother of the OPEC group, taking on the responsibility for making sure cuts happen and the market is balanced. Russia is being as difficult as ever.
And the US is continuing to do its own thing, oblivious of its impact on world markets or how in many respects its cutting off its nose to spite its face. As we sit under the key technical level of $56.58, keep an eye whether we break to the upside or are beaten back from that point; it will give us a clue to the movement going forward in the short term.