OIL drops below $80❗

Brent and WTI are trading almost 1% lower today. Brent (OIL) dropped below $80 per barrel for the first time since March 31, 2023. This means that price has finally closed a massive bullish price gap that was triggered by an unexpected OPEC+ output cut, led by Saudi Arabia and Russia. There is a lot of uncertainty over whether this output cut was "real" as a number of OPEC+ members has already been producing below agreed quotas. Moreover, concerns over global economic growth, and in turn oil demand, are also mounting:

• US president Biden wants to restrict investments in some sectors of Chinese economy what may further limit growth in this country
• Regional Fed indices from the US are showing signs of economic weakness
• Banking fears have been reignited by poor Q1 earnings release from First Republic Bank

Taking a look at OIL at D1 interval, we can see that the price dropped below $80 mark today and closed a bullish price gap. However, bears seem to struggle to deepen the move below $80 support zone. Should we see a break below, sellers may target $76 support zone. On the other hand, successful defense of $80 area could hint at possibility of OIL climbing to the upper limit of the trading range in the $87 area.

OIL at D1 interval. Source: xStation5