Technical analysis and trading recommendations - https://fxpcm.com/fx/brent-price-decreased-7-march-highs-04042016
Overview and Dynamics
On Friday, the price of Spot Brent crude lost more than 1.5 dollars per barrel. On Monday, the price continues to decline, trading to the beginning of the European session near the mark of 38.30 and a decrease of 7% from March 22 recorded its highest close in four months.
Oil futures fell while more than 11%.
According to data presented on Friday by the Commodity Futures Trading Commission, investors have begun to open short positions and reduce long for the first time since early February.
Saudi Arabia's Crown Prince Mohammed bin Salman said on Friday in an interview with Bloomberg, that Saudi Arabia will cut its oil production only in the case of the same agreement by Iran and other major oil-producing countries.
A little earlier oil minister of Qatar, Mohammed bin Saleh al-Sada said that their participation in the summit, dedicated to the freezing level of oil production, which will be held April 17 in Doha, have already confirmed the 12 countries of the expected 15-16 countries.
Given the fact that Iran is not going to cut or freeze the production volumes until the leaves on level of 4 million barrels of oil per day, the chances of an agreement between Saudi Arabia, Russia and other countries are reduced. The meeting in Doha may be delayed, and no agreement is reached.
US crude stocks increased again while at maximum levels since 1930 more than 500 million barrels of crude oil. World oil reserves are also near record highs.
Even if an agreement is reached on the freeze of production levels at current high levels, it is unlikely to lead to a reduction in the oversupply.
Thus, the downward trend in oil prices in the current situation will continue to grow.