Sideways Channel in Crude Oil – Wait for a Breakout
Arslan Butt • 1 min read
WTI crude oil prices slipped over sentiments that demand for energy products are set to get a hit over an economic slowdown. During the early Asian session, crude oil prices dropped due to the economic slowdown that has begun to depress energy demand, but markets got some help after Saudi Arabia said an agreement was emerging with other producers about continuing supply cuts.
The West Texas Intermediate (WTI) crude trades at $53.05 per barrel, falling 0.4%, from the last settlement. Overall, crude oil is around 20% below 2019 highs reached in late April, with May posting the first monthly drops since November.
On the flip side, ither energy prices, like coal and gas, are also being walloped by the downturn. Tanker brokerage Eastport said on Tuesday that the continued trade war has raised concerns of a global economic slowdown as well as weaker oil demand.
Key Trading Level: 55.42
Technically, crude oil hasn’t changed much from yesterday. The support still stays at 52.50 along with resistance at 55. On the downside, a bearish breakout could lead oil prices towards 51.65 and 51.
Whereas, the bullish breakout could open further room for buying until 56.10 today.