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Since the beginning of January, the price of oil has lost more than 60% of its value, hitting a low in the area and a low in the area of $ 19.27. It currently stands at just under $ 23, but the volatility of the past week has been nothing short of terrifying. In fact, we’ve seen fluctuations from + 10% to -10% like it’s the most natural thing in the world.
Before going on to discuss the reasons that made the price of oil so low, we want to answer a question that gives an idea of the collapse we witnessed in this first quarter of 2020.
Will it cost more than a liter of water or oil?
A barrel of oil costs $ 23, which at the current exchange rate corresponds to € 21. As a barrel corresponds to 159 liters, the cost per liter of oil is around € 0.13.
However, if we consider the mineral water found in the supermarket, the price per liter fluctuates between € 0.11 and € 1.
Therefore, a liter of oil costs as much as the cheapest mineral water. A. little for what was once called black gold.
We have already written about the macro reasons that led to the collapse of the oil price that we witnessed on April 9 (What does the OPEC + agreement on the price of oil imply for the pockets of savers?).
Meanwhile, in the last hours, the news has added that, in addition to the cut of 10 million barrels per day according to the draft OPEC agreement, there would be an agreement among the G20 members to reduce the production of another 5 million barrels per day.
How far can the price of oil go down?
Oil (real-time price) since March 17 has moved within a trading range in the $ 22.4- $ 28.66 range. Note that the lower level represents the broken price target II that the quotes would go towards the price target III in the $ 6 area. Intermediate supports are represented by supports in the $ 16 and $ 12 area.
If, on the other hand, resistance in the $ 28.66 area breaks at the end of the day, prices could go towards the $ 40 area.
In the next sessions, therefore, carefully monitor the indicated levels at the end of the day,
Oil: Bearish projection in progress in daily time frame. The blue line represents the running bisector levels; the red line the levels of The new law of vibration.
