- Brent closed last week below the trendline sloping upwards from January 2016 lows.
- Prices remain below $60 per barrel after an almost 8-percent drop on Friday.
Brent oil closed last week at $58.80, confirming a downside break of the trendline connecting the January 2016 and June 2017 lows.
Notably, prices fell 8 percent on Friday on concerns that growing supply and the weakening demand side pressures could create a glut next year.
As of writing, the front-month contract is trading at $59.37 per barrel, having hit a 13-month low of $58.41 on Friday. Currently, prices are down more than 30 percent from the 4.5-year high of $86.74 reached in October.
The near 90-degree sell-off is now looking overdone, as per the 14-day relative strength index (RSI). The corrective bounce, if any, however, could be short-lived unless fears of over-supply suddenly subside.
That said, the likes of Paal Kibsgaard, the CEO of Oilfield services company Schlumberger, are of the opinion that the current downturn would be short-lived.
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