This week's trading session began with fresh new woes for the energy market as the price of crude oil resumed trading lower on the major misbalance between supply and demand.
The price fell below $15 per barrel for the first time in over two decades as the global supply glut remains weighing down the market.
Traders are hoping for a new supply and demand equilibrium to be reached soon, but more time is going to be needed before the recently agreed-upon production cuts by all OPEC+ members start taking shape.
As we already pointed out:
"The agreed-upon reductions of 9.7 million barrels per day came just below the initially proposed 10 million barrels per day. This decision ultimately took away from the significance of the agreement. Moreover, the agreements would be implemented from the 1st of May onwards, which means that the glut in the global supply would be allowed to persist at least until the end of April."
And while oil-producing countries have been slow to implement the necessary reductions to their production capacities, the global demand remains ostensibly muted.
This is due to the fact that many economies remain on lockdown as governments maintain stringent restrictions on their national levels. For as long as this massive disparity between supply and demand remains prevalent, the price of crude is likely to continue trading so low.
As can be seen on the 4H chart below, crude has broken down below the bearish channel's lower boundary, which is indicative of mounting selling pressure.
Crude Oil 4H Price Chart. Image source: Trendsharks ©, created with TradingView.com
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