WTI: in hands of the bears, fundamentals diverge from sentiment, $41.00 on the table?
|WTI has been consolidating the bearishness around the black gold of late with markets still unable to trust in the OPEC deal while fundamentals are diverging from sentiment.
In recent sessions, oil made new lows for the month to challenge the May lows down in the $43.50's. At the time, WTI was just one dollar away from that price on the 15th June when the greenback rallied on optimism around the Fed and US economy. The price drifted lower again today due to worries about U.S. output growth persisted. The recent U.S. oil rig count in the Baker Hughes continued for the 22nd week showing that supply is coming on-line with yet another six oil rigs that have been added.
US dollar fills opening gap, refreshes session top above 97
This is a continuation of supply that has been pressuring the price of oil for over three years and there seems to be no let-up, no matter how hard the OPEC and Russia accord tries to curb supply. This deal is currently supposed to be keeping 1.8 million barrels a day off the market, but as can be seen in the price action, oil is down 17% since the deal was struck at the end of 2016 and markets have lost faith. At this rate, oil can get to $41.00 through $43.50, $42.09 and $41.80 as support levels on the daily sticks.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.