- WTI has fallen on the day and is testing key support structure.
- Concerns that surging COVID-19 cases in Asia would dent demand for crude is hurting the price.
Crude oil prices fell over $2 a barrel on Wednesday to their lowest in three weeks.
WTI was down by some 2.85% in the last trading hour of the North American session due to concern that rising COVID-19 cases in Asia would dent demand for crude. WTI fell from a high of $65.33 to a low of $61.98 on the day.
Also, the concerns over the rising inflation expectations would be expected to force the Fed's hand would slow economic growth with interest rate hikes dented the oil market.
Traders also cited rumours that the Iran nuclear talks were making progress, which could boost global crude supplies and depress prices.
On the geopolitical front, bears are relishing in the prospects that Iran could provide about 1 million to 2 million barrels per day (bpd) in additional oil supply if a deal is struck.
WTI prior analysis
The price is in a major sea of chop between a wide sideways range, or otherwise known as the ''Barroom Brawl Zone'':
The price action is random and volatile and breakout traders are looking for the breach of either side of the channel.
However, there could be a meanwhile opportunity within the channel on the basis that the price action has left a sizeable wick on the downside in a 50% mean reversion.
15-min chart
The opportunity is move evident from a 15-min vantage point perspective.
The price is being resisted near a 61.8% Fibo of the 15-min price drop's range.
On breaking the current support, on a restest of the structure, the price would be at a discount and the probabilities will be in the bull's favour for a downside retest of the daily channel's support structure.
Outcome, 4-hour chart
As illustrated, the price did indeed melt to the downside but is yet to clearly break the support zone.
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