WTI Oil Outlook: WTI price falls sharply and breaches key technical supports on renewed demand fears

US CRUDE OIL

WTI price fell nearly 2% in European session on Wednesday, after renewed fears on threats that ongoing trade conflict can escalate and affect global demand, prompted investors to sell the contract. Comments that Russia is studying possibilities of increasing the output cut among OPEC+ group, but also pointed to all arguments that are in favor of extension but also at those against, leaving the subject open that additionally disappointed traders. OPEC+ group's agreement for reduction of oil output by 1.2 million bpd expires at the end of June and the group will meet either at the end of June of early July to discuss whether and how to extend the deal. Fresh weakness breached strong technical supports and generated fresh bearish signals that shifted near-term risk lower. Surge through the base of rising daily cloud ($58.91) and ascending 100SMA ($58.51) pushed the price below $58.00 handle and increased pressure on key near-term support at $57.32 (Fibo 38.2% of $42.36/$66.58). Close below daily cloud base is needed to signal further weakness, but violation of $57.32 pivot will confirm fresh bears and open way towards Fibo projections at $57.05 (176.4%) and $56.13 (Fibo 200% projection of bear-leg from $63.93. broken cloud base now reverted to strong resistance which needs to cap potential upticks to keep fresh bears alive. Releases of US crude stocks data (API report is due later today and EIA on Thursday) which were postponed due to US market holiday, are also eyed for fresh signals.

Res: 58.51; 58.51; 58.91; 59.53
Sup: 57.65; 57.32; 57.05; 56.13