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Brent oil prices continue to slide from strong resistance level of $66 per barrel to this year lows of $64.

Brent oil prices continue to slide from strong resistance level of $66 per barrel to this year lows of $64. International energy agency (IEA) released a forecast for 1H2020 with a surplus of 1 mln barrels per day that keeps the prices at their lows. A new negative factor for the oil market is the outbreak of a new strain of coronavirus (2019-nCoV) in China. Although the massive worldwide outbreak of the virus is unlikely Goldman Sachs estimates the virus could wipe out 260,000 bpd demand from the oil market in 2020. "Such a demand impact (without an OPEC supply response) would point to an only $3/bbl impact on oil prices, although the initial high uncertainty could lead to a larger sell-off, as was the case in March 2003", said Goldman. The market is looking for an oil reserves and production data in the United States due to be released Jan. 23. The continuous growth in US oil production reached 13 mln bpd. Further growth could put additional pressure on oil prices. On the other hand unfolding military conflict in Libya continue to disrupt oil supplies from the country worth 800,000 bpd. OPEC+ agreement on oil production cuts is extended at least for 1H2020 and is partially offsetting the excessive world supply. Bank of America estimates oil demand to rise by 1.1 mln bpd. That could lower the surplus to only 190,000 bpd this year. Demand for fuel is seen elevated in coming spring and driving season. That could support oil prices. Technical picture points at strong support level for Brent oil at $63 (Dec 2019-Jan 2020 lows). Investors could consider the possibility the price could bounce from this level and move higher to $66-67. In alternative scenario the price may break the resistance level and slide to $60,5-$61. Disclaimer: Analysis and opinions provided herein are intended solely for informational and educational purposes and don't represent a recommendation or investment advice by TeleTrade. Indiscriminate reliance on illustrative or informational materials may lead to losses