WTI stabilizes on $52 handle following a 17% drop in May

WTI stabilising following heavy bleeding.
WTI is currently trading at 52.98 and has travelled between a high of $53.41 and a low of $52.16bbls.

Oil prices have plummeted to a key technical level on the charts, ending just a stone throw away from the 200 W EMA target at 52.40. Another dollar lower, the price will have exceeded the 38.20% Fibo of the Dec lows to recent highs at $51.64. WTI is down nearly 17% since the start of May.

Global demand is seen to be falling, and while we awit the outcome of OPEC with respect to supply cuts, Iran is taking up the noise space and contributing to the slide of oil prices. It was reported recently that Iranian President Hassan Rouhani’s expression of willingness to negotiate with the U.S and U.S. Secretary of State Mike Pompeo's response, “We’re prepared to engage in a conversation with no preconditions,” he said. “But the American effort to fundamentally reverse the malign activity of the Islamic Republic, this revolutionary force, is going to continue.” Iranian Foreign Minister Mohammad Javad Zarif said, “Threats against Iran never work." “Never threaten an Iranian, try respect, that may work.” What’s more, he said, the U.S. can’t be relied on to keep its word. “People think twice before they talk to the United States because they know that what they agree to today may not hold tomorrow,” Zarif said.

WTI levels

Technically, the price was a stone throw away from the 200 W EMA target at 52.40 and ended just ahead of the 38.20% Fibo at 51.64 which has a confluence with 11th Feb major swing lows as an additional downside key target at 51.26. However, the 53 handle looks to be a congested area on the historical chart and a pullback might be expected at this juncture and the trend is stretched on a lower time frame. The 56.30s come as a 50% mean reversion of Friday's sell-off. However, weekly stochastics remain bearish and the price is now well into a reversal of the Dec. commencing rising channel that ended on 22nd May.

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