Oil prices declined further due to concerns about demand, although geopolitical factors continue to provide support

Oil prices extended their steep decline for a second consecutive day, reaching a two-week low early Tuesday, after dropping nearly 4% on Monday.

The drop was driven by a weaker demand outlook and indications that Israel will not target Iranian oil infrastructure. OPEC’s reduced forecast for global oil demand in 2024 added further pressure, though geopolitical tensions and the threat of escalation could limit the downside.

Prices approached the key $70 support level, where bears may encounter resistance. Momentum indicators suggest a possible reversal, with the 14-day momentum attempting to turn positive just above the centerline, while the stochastic nears negative territory.

A pause around the $70 mark seems likely, but near-term bearish sentiment is expected to persist as long as any rebound remains capped below the daily cloud base and Kijun-sen ($71.89), which could present better selling opportunities.

A decisive break below the $70 level would signal further bearish momentum, opening the way for targets at $66.33 (Oct 1 low) and $65.26 (2024 low posted on Sep 9).

Res: 70.74; 71.89; 72.69; 73.70
Sup: 70.00; 69.30; 68.37; 66.33