Oil price fell further to around $35.22 as hopes that the key oil producers will agree to freeze oil output is fading. The oil producing countries are going to hold a meeting this month in order to discuss the global oversupply problem.
Oil price broke above $40/bbl last month on expectation for the talks that was led by Russia and Saudi Arabia, but the commodity has been under pressure in recent weeks. There will be a meeting in Doha in April 17 with agenda to reach agreement among the oil producing countries to freeze production at January 2016 levels. However, economists believe that only a production cut can lead to sustained price recovery.
Oil fell when Saudi deputy crown price Mohammad bin Salman said that Saudi would only agree to limit oil production if Iran and other major producers do so.
Iran crude oil production has surged since the nuclear sanctions were lifted in January. Until now, the country’s oil exports has passed two million barrels per day.
From the technical analysis point-of view, oil price remains under pressure in short-term outlook, hit the level of 35.22 which is served as intraday key support. If the price managed to break the support, oil price slump may continue to 34.69-34.24.
Hourly stochastic and CCI are overbought in general. However, it will be better if we prepare for a possible pull-back move to the Fibonacci resistance area at 36.20 (50% Fibonacci). In that case, watch for bearish signal confirmation with 35.68 as target and 35.22 in extension.
Be careful if the price managed to break the resistance at 36.20 because it may turn the intraday bias to bullish and possibly will push oil price up to 36.76 or 37.18.