Brent oil may break a support at $25.13 per barrel, and fall into a range of $21.65 to $23.66, as suggested by a retracement analysis.

The support is provided by the 76.4% retracement on the uptrend from $21.65 to $36.40. A double-top forming around $36.40 suggests a target around $21.65, while a flag forming between $27.28 and $29.03 indicates a much lower target of $18.

The bearish sentiment is strong. There might not be a decent bounce until oil falls to $21.65. On the daily chart, the wave pattern suggests the development of a wave 5, which is capable of travelling to the March 30 low of $21.65.

A projection analysis on a bigger wave -C- from $75.60 indicates a lower target of $16.04, the 161.8 per cent level. In an extreme case, oil may drop to $1.98, if it follows the chart pattern of May WTI.

(Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.)

(No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses)

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