Crude oil price down 27% today, can it reach $10 this month?

By: Michael Harris
Michael Harris
Specialising in economics by academia, with a passion for financial trading, Michael Harris has been a regular contributor to… read more.
on Apr 20, 2020
Updated: Apr 28, 2020
  • Crude oil price hits lowest levels since 1999
  • Despite low market prices, it seems there is practically no demand for oil at this stage
  • Sellers will be targeting $12.20, $11.30 and $10.65 next

Crude oil price trades around 27% lower to trade at levels below the $14 mark for the first time since early 1999 as supply is hitting record highs, while demand may reach the lowest levels since 1985, according to the International Energy Agency (IEA). 

Fundamental analysis: Storage runs out

Crude oil prices are trading under an extreme amount of selling pressure due to the collapse in demand amid the COVID-19 outbreak. Invezz reported over the weekend that the IEA predicts demand for oil to hit a 25-year low in April.

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“The current forward crude oil curves for Brent and WTI are now in very deep contango, but the contango is also very front-loaded,” said Bjarne Schieldrop, chief commodities analyst at SEB.

“The curves are saying we have a big problem with the storage of oil right now.” 

The coronavirus outbreak has placed many countries under lockdowns, which created an unprecedented shock in energy markets. The storages in the United States are filling up quickly with demand expected to increase in the second part of the year when restrictions around the globe are eased. 

“The U.S. situation is quite dire,” said Daniel Hynes, senior commodity strategist at ANZ.

“Clearly, being a relatively landlocked market there, we are seeing real pressure on storage as a consequence of the collapse in demand. Without any sort of hope I suppose, at least over the next month about that easing up. I think prices are going to remain under pressure,” he added. 

The IEA is projecting that demand for oil will register a drop by 29 millions of barrels per day (mb/d), followed by a plunge of 26 mb/d in May. 

Technical analysis: Intra-weekly support hit immediately

Crude oil price is hitting new lows almost every minute now. The price action is crashing in a vertical manner with almost no demand from the buyers, despite the prices hitting the multi-decade lows. 

Crude oil price monthly chart (TradingView)

Today’s low of $13.30 is the lowest crude traded since 1999, as the sellers try to breach the 1994 lows. Overall, $13.75 is an important horizontal support while $12.20 should provide a stronger support lower. 

If the price closes below the $12 handle today, we may see a trip to the 1999 low of $11.30 next, with $10.65 next in line in the context of a support. 


Crude oil trades at 20-year lows today after it crashed in Asian and European trading sessions. The sellers are in full control of the price action, as there is practically no demand for crude oil despite extremely low market prices. 

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