Oil price drop 7% as the nightmare of the virus is not over (with trading strategy)
The epidemic in many European countries has worsened, and oil prices have plummeted by 7%, the biggest one-day drop since last summer.

International oil prices fell for the fifth consecutive trading day, marking the biggest one-day increase since last summer. London Brent crude oil futures fell 6.9% to close at $63.28 a barrel, while US crude oil futures fell 7.1% to close at $60 a barrel.
Oil prices fell for the fifth consecutive day on Thursday, marking the biggest one-day drop since last summer, due to growing concerns about the increase in confirmed cases of the new coronavirus in Europe and the strengthening of the U.S. dollar.
Since March 8, the two major contracts have fallen by more than 11%. It has fallen for five consecutive days. This is the longest decline in US crude oil since February 2020 and the longest decline in Brent crude oil since September 2020. Previously, speculators established the largest long position since 2018 in US crude oil futures and options traded on the Chicago Mercantile Exchange.
U.S. crude oil inventories have risen for the fourth consecutive week, as severe cold weather in Texas and the central United States forced refineries to shut down in February.
With the increase in the number of new cases, several large European economies have had to re-impose the lockdown. At the same time, due to concerns about the side effects of the widespread use of AstraZeneca vaccine in Europe, vaccination plans are slowing down.
Not only did crude oil prices plummet, but US heating oil and gasoline both fell more than 5%. "The best scenario for the demand recovery has been digested by this market. Everyone is celebrating the reduction in vaccination and epidemic restrictions," said John Kilduff, a partner at Again Capital LLC in New York.
Tamas Varga, an analyst at the PVM Petroleum Association, said: "Short-term developments-vaccine health and increased U.S. oil inventories-are driving market sentiment, but the longer-term oil outlook remains encouraging. Yesterday's Fed meeting boosted the stock market... …U.S. economic growth is revised upwards, while the unemployment rate is expected to fall.” Varga added that the market will wait for US manufacturing data next week for further signs of the health of the US economy.
Trading strategy ( Source: Trading Central)
Pivot: 61.15
Our preference: short positions below 61.15 with targets at 58.20 & 57.30 in extension.
Alternative scenario: above 61.15 look for further upside with 62.25 & 63.30 as targets.
Comment: as long as the resistance at 61.15 is not surpassed, the risk of the break below 58.20 remains high.
Supports and resistances:
63.30
62.25
61.15
60.26 Last
58.20
57.30
56.05
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