WTI Oil – Strong bearish sentiment offsets positive signals
|US CRUDE OIL
WTI oil is consolidating above fresh multi-month low at $42.04, (the lowest since Aug 2016) posted on Wednesday. The price remains firmly in red, following limited upside overnight that was capped at $42.70. Strong bearish pressure on global oversupply fears offset the impact of better than expected US Crude Stocks data, released on Wednesday, which showed crude inventories falling more than expected (2.5 million barrels draw vs forecast for 1.2 million barrels draw). Oil price met its target at $42.19 (14 Nov 2016 low) and focus is turning towards $41.09 (11 Aug 2016 low) and $40.63 (50% retracement of larger $26.04/$55.22, Feb 2016/Jan 2017) rally). Oil may extend consolidation above new low, as daily studies are oversold, but so far without reversal signal that limits recovery attempts. Session high at $42.70 marks initial resistance, followed by $43.00 and first pivot at $43.74 (former low of 05 May / Fibo 38.2% of $46.46/$42.04). Sustained break here is needed to trigger stronger correction which is also signaled by daily RSI bullish divergence.
Res: 42.70; 43.00; 43.74; 44.40
Sup: 42.26; 42.04; 41.09; 40.63
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