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Brent crude futures contract traded on the Intercontinental Exchange (ICE) is in a strong downtrend. The contract recorded a high of $115.71 per barrel in June last year and has tumbled 58 per cent from there.
A low of $45.19 was recorded in early January and the contract has risen slightly from there to $48.8 now.
The overall downtrend remains intact. Key resistances are at $53.5, $62 and $66. Key supports are seen at $42, $40 and at $34.
The current downtrend can extend further to $42 and $40 in the coming months. But whether the slump in prices can exceed beyond $40 to $34 is not very clear at the moment. A reversal from here will have the potential to take crude oil prices higher to $60 and $65 in the long term.
However, this reversal rally might be slow rather than a sharp and fast recovery.
On the domestic front, the crude futures traded on the Multi Commodity Exchange which moves in tandem with the NYMEX Crude oil price is also in a strong downtrend. It is currently at ₹2,837 per barrel. Key resistances are at ₹3,100 and ₹3,800.
A fall to ₹2,400 looks likely now. Inability to reverse higher from ₹2,400 will increase the danger of the fall extending towards ₹2,000 or even ₹1,800.
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