Laurence Balanco of CLSA sees Brent Crude prices falling to $50 per barrel

Laurene Balanco, the CLSA global chartist, expects Brent Crude prices to fall to levels of $50 per barrel. Brent Crude futures are currently trading near the $74 per barrel mark and that implies a potential downside of over 33% from those levels.

"Over the past 18 months, we have seen the $70 per barrel to $71 per barrel area be quite a key support area. But every rebound that we have had off that $70-71 per barrel support area over the past 18 months has met selling pressure as on every rebound," Balanco told CNBC-TV18 on Thursday, March 27.

Global crude oil prices have declined over 10% from their peak this year amidst concerns of oversupply and lack of demand. OPEC+ is also set to increase production starting next month.

However, prices found a floor below the mark of $70, owing to some positive economic data from China, stimulus announcements from the country and some proposed sanctions from US President Donald Trump on Venezuela, which has one of the biggest crude reserves in the world, and re-emergence of geopolitical tensions in the Middle East.

US crude inventories on Wednesday fell to their lowest levels in a month, providing a further fillip to prices overnight. The West Texas Intermediate is also nearing the mark of $70.

"So what you have had is this characteristics of selling the rallies in brent, which builds a pressure on this $70-71 per barrel and ultimately suggests a break below that level. And again, from a longer-term perspective, that suggests a downside target of $51-52 per barrel on Brent oil," the CLSA chartist said.

Major oil traders including Trafigura Group and Gunvor Group are bearish on crude prices over the rest of the year due to rising supply, particularly from outside OPEC+. The producer group is also scheduled to start reviving idled output next month, the first in a series of planned hikes.