WTI rebounds from 50-day MA but relief may be short-lived


  • WTI has recovered to $40.35 from Thursday's low of $38.75.
  • Political uncertainty in the US and growth concerns could keep oil under pressure. 

West Texas Intermediate (WTI), the North American oil benchmark, is currently trading in green near $40.35 per barrel, having tested the 50-day simple moving average (SMA) support of $38.75 on Thursday. 

The relief, however, could be short-lived on account of the potential for serious political uncertainty in the US. President Trump suggested on Thursday that the nation should delay its November Presidential election, as postal voting could lead to fraud and inaccurate results. 

Trump’s comments are being viewed as an attack on the integrity of the coming election. After all, the date of the US election is enshrined in the US Constitution and the President cannot delay election without congress. 

Apart from political uncertainty, growth concerns could weigh over black gold. The official data released on Thursday showed the US economy, the world’s biggest oil consumer, contracted at a 32.9% annualized rate, the deepest decline in output since the records began in 1947, according to Reuters. 

In addition, contango in Brent futures market structure is signaling an immediate oil surplus. “The market will flip back into a mini-supply glut and a swing to the deficit will not happen until December 2020,” Rystad Energy’s Head of Oil Market Research told Reuters. 

Put simply, the odds appear stacked in favor of a re-test of the 50-day SMA support. 

Technical levels

WTI

Overview
Today last price 40.39
Today Daily Change -0.08
Today Daily Change % -0.20
Today daily open 40.47
 
Trends
Daily SMA20 40.89
Daily SMA50 38.89
Daily SMA100 32.1
Daily SMA200 43.72
 
Levels
Previous Daily High 41.5
Previous Daily Low 39.1
Previous Weekly High 42.52
Previous Weekly Low 39.99
Previous Monthly High 41.65
Previous Monthly Low 34.45
Daily Fibonacci 38.2% 40.02
Daily Fibonacci 61.8% 40.59
Daily Pivot Point S1 39.21
Daily Pivot Point S2 37.96
Daily Pivot Point S3 36.82
Daily Pivot Point R1 41.61
Daily Pivot Point R2 42.76
Daily Pivot Point R3 44.01

 

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