Geopolitical tensions which were triggered over the weekend were the main driver for the upward movement of the oil price. However, as these tensions are easing off a little, we see the focus back towards the over supply issue. The main support is near the 37.75 mark and a break of this level will open the floor toward the 35 dollar mark. Although we have moved back from the lows of 40 dollar but we are still trading below the downward trend line on daily time frame and this confirms the downward trend.
We are also trading sharply below the 100 and 50 day moving averages, which confirms that the overall trend is still towards the downside and as long are below these averages, the bias remains towards the downside.