Global benchmark Brent crude oil had its biggest one-day drop in two years on Wednesday as escalating US-China trade tensions threatened to hurt oil demand, and news that Libya would reopen its ports raised expectations of growing supply. The sell-off began after Libya’s National Oil Company said it would reopen ports which had been closed since late June. Nearly 800,000 barrels of oil per day will be exported again and this should calm fears of a growing oil shortage in the market.
Technically, oil prices broke below its short-term support of $72 with ease during yesterday’s sell-off, making the short-term trend bearish. Going forward, any rise towards $72 would attract selling pressure. On the downside $70 is likely to be psychological support, below which prices might head lower towards $68.80 level.