Oil prices likely to fall strongly if support breaks.
This article is originally referred from Orbex Technical Analysis.
Crude oil prices were seen easing back last week.
The decline in prices came both on a technical correction but supported by the fundamentals.
Crude oil prices eased after data showed a record U.S. crude oil production and rumors of OPEC likely to boost oil supplies going forth.
Oil prices were seen losing more than 1% on the week.
The crude oil production from the U.S. was seen rising to the record highs since late last year and in March, crude oil production increased by 215,000 barrels per day to 10.47 million barrels.
While OPEC, Russia and other non-OPEC nations pledged to cut crude oil output by 1.8 million barrels per day until end of this year, latest rumors suggest that the oil cartel would be looking to increasing supply by next year.
This comes mostly on the shortages on the supply side.
News reports suggested that Saudi Arabia and Russia were discussing to boost crude oil output by 1 million barrels per day to compensate for the loss in supply from Iran.
From a technical perspective, we expect Crude oil prices to consolidate around the current technical level of $65.80 – $65.46 level of support.
A rebound off this level is likely ahead of what could be higher oil prices in the near term.
Alternately, the consolidation at the support could mean that oil prices are likely to form a technical bearish flag pattern.
A break down below the technical level could signal further losses in store.
Original Source: Orbex Technical Analysis