WTI keeps bleeding below 2018 prior lows, 61.8% Fibo target now in sight at $55.18bbls
- WTI keeps bleeding and just when you think, "well, there's the bottom," it bleeds some more.
- WTI is currently trading at $57.53, that is up from the session low of $56.97 and down from the day's high of $59.52 - (The Oct 2nd high was $76.82 and today's price action has just broken the 8th Feb 2018 lows of $57.96).
The price of oil is rolling over due to rising production and a softening in U.S. oil sanctions on Iran which means that Iran is still producing and selling oil - Something the market priced out and considering that the US had a change of heart at the 11th hour, we have seen an increase if Saudis production that was arranged in order to offset the presumed shortfall with Iran being offline.
The question is whether the market is going to look for profit taking at this juncture, as this is surely a technical target for the majority of speculative short chasing the offer - at the 2016-2018 uptrend? After all, this is the biggest losing streak on record for WTI and it is headed for its lowest finish year to date. There are whispers that OPEC are now going to cut production and that Saudi Arabia have cut 500K barrels for December delivery - there will be an OPEC meeting in December where production cuts will likely be announced - So until then, where next?
Where next?
We still have the Weekly Petroleum Status Report that will be released on Thursday, November 15, 2018 at 11:00 A.M. and 1:00 P.M. (Eastern Time) due to the closure of the Federal Government on Monday, November 12. (We will also have its estimate on U.S. shale output for December). Analysts polled by S&P Global Platts expect the government agency to report a rise of 2.3 million barrels in crude stockpiles for the week ended Nov. 9. That would mark an eighth straight weekly climb - So that too is likely to weigh on the price which could add to a record number of consecutive down days for WTI since it started to trade in 1983 - we are already at eleven consecutive declines - soon to be twelve by the way price action is headed today.
WTI levels
A break below S3 at 55.58 opens the 61.8% Fibo retracement key target of the move between late June 2017 lows and recent early Oct highs - this comes in at 55.18 and is perhaps a level that traders will target before a bottom can finally be called. However, a bounce from here opens risk back towards 59.81 as the pivot that meets a cluster of lows as a support line for Feb-April business done in 2018 - (ould support turns resistance).
Author
Ross J Burland
FXStreet
Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.
