- Market expects the US to abolish export bans,
- Production in Russia increase last year and production in Iraq and the US is expected to increase in 2015.
- OPEC is not expected to cut production levels any time soon. Saudi Arabia applies a discount to the European sales in order to be able to get rid of the oil it couldn't sell in the US:
- Global economy, on the other hand is still fragile. This coupled with the strong US dollar which might result in lower demand.
The MACD is deep in the negative territory and crossed the signal curve just yesterday. The decline seems unstoppable, although the relative strength index is in the oversold territory (at 19). In the case of a correction the first resistance level to combat is at 60 dollar (also the 20DMA).
If the decline of the price continues and it breaks the 50 dollar level, there is space enough until 40 dollar for further losses.
As gas prices in European contracts are generally indexed to the oil price, the recent depreciation of the Brent might drag the gas prices lower as well increasing its competitive advantage to coal. By the end of the day this could have a negative effect on the carbon prices as well.