Brent oil hits two-week low, drops below $39/barrel

By FXStreet Brent oil fell to a session low of $38.61; the lowest since March 15th as markets fear Saudi’s hard line stance may derail joint OPEC and non-OPEC effort to support prices.

Trades below $23.6% Fibo

Prices currently trade below $38.92 (23.6% of Jan low-Mar high). The sell-off began in early Europe after prices failed to take out 10-DMA and gathered pace after Saudi said it would freeze output only if Iran and other nations agree to do so.

Markets were rattled as Saudi’s stance has brought everything once again to ground zero, since Iran has made it clear time and again that it would not freeze output unless it regains lost (sanction years) market share.

Meanwhile, strong US wage growth figures also strengthened USD, adding to the bearish tone around oil.

Brent oil Technical Levels

The immediate support is seen at $38.34 (falling trend line support on daily chart), under which prices could test $37.55 (Jan 5 high). A break lower would expose $36.65 (38.25 of Jan low – Mar high). Conversely, acceptance above $39.26 (rising trend line hurdle) would open doors for a re-test of 5-DMA at $39.64 and $40.41 (daily high).
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Source:: FX Street