In a doji formation, oil prices are back under pressure below the rising bearish wedge's support line; Will bulls commit?
|- The price of oil has been stuck in a range of indecision from both of the bulls and the bears on Tuesday at a key techncial juncture.
- WTI is heading for a NY session close of around $56.50bbls, well below bullish territory and exposes a continuation of the downside following a breakout of the rising bearish wedge formation.
WTI has formed a doji on the daily charts which is a sign of a potential reversal. The fundamentals at play have been Sino/US trade talks which had been starting to support a bullish case for the price of oil on pure demand aspects on prospects of a trade deal between the two largest economies. However, there is little concrete and the matter is complicated and yet to be solved. Therefore, the market has stagnated and subject to a sell-off if traction in trade talks are not made ahead of the March 1 deadline for when extra tariffs will be imposed.
Elsewhere, the EIA forecasted U.S. shale oil output to climb by 84,000 barrels a day in March ahead of its weekly petroleum status report at 11 a.m. Eastern Time Thursday. this will arrive a day later than usual due to the Presidents Day holiday earlier in the week.
Bullish fundamentals
West Texas Intermediate crude oil added 38 cents, or 0.%, at $55.9 bbls on the New York Mercantile Exchange. In the background, OPEC and its allies are helping to foster recent gains in crude with the Saudi's production cuts exceeding their required agreed amount as they seek to offset the lack of compliance by countries such as Iraq. Saudi crude-oil volumes dropped this month so far to 6.2 million barrels per day, down 1.3 million barrels a day on the previous month. Elsewhere, Venezuela news has taken a back seat, for now, but is an additional bullish case for oil considering the sanctions imposed.
WTI levels:
From a technical standpoint, the price is back below the rising wedge in a doji formation, pointing to a possible correction, or even a reversal o the upside from the lows of figure 51 or thereabouts. To really convince, bulls need to move to the wedge’s resistance and on the way to R2 located at 57.22. However, a break of 51.50 and the 27th Jan fractal low will open a run to 50.63 as the last defence for 50 the figure, and 7th Jan swing high at 49.96. On the wide, the bottom of the prior trend is down at 42.54 (top of reverse H&S head).
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