Brent oil gapped lower, hovers above $41/barrel

Brent oil gapped lower in Asia after Doha talks failed and now trades above $41/barrel levels.

One-week low

Prices dropped to $40.82, lowest since April 8th. Prices remained well bid throughout last week as markets were hoping the major OPEC and non OPEC producers would sign a production freeze accord over the weekend.

However, the talks fell apart as rift between Saudi and Iran played a spoil sport. The deal was never expected to correct excess supply, but would have signaled markets the major producers could work on common terms. The failure of talks has thus led to a sharp drop in prices.

Brent Technical Levels

The immediate hurdle is noted at $42.27 (Fri’s low), above which prices could test $43.27 (200-DMA). On the other hand, a break below $40.82 (daily low) would expose $40 levels.