WTI Crude Oil’s Bearish Channel in Play – Bullish Correction Looms
WTI crude oil gained slight support after falling dramatically during the previous week. Traders are fearful that the global economic recession will weigh on WTI crude oil’s demand growth. Investors are also concerned about the United States and China trade deal which is keeping black crack under selling pressure.
Both contracts closed the last week with more than 5% losses due to depressed manufacturing data from the United States and China, as the long-standing trade war between the world’s top economies hurt the global growth and increase the chance of economic slowdown.
The United States and Chinese leaders will meet in Washington on October 10-11, expecting fresh efforts to work towards reaching a positive outcome.
At the supply front, the unexpected faster recovery in Saudi Arabia’s production after the 14 September drone attack on key production output also created bearish pressure on WTI crude oil prices, although the Middle East is still tensed.
While Saudi WTII crude oil production is now close to 9.9 million BPD, it’s unclear whether the capacity is fully operational at 11.3 million BPD, and the destroyed Abqaiq output has lost a significant part of its excess.
WTI Crude Oil – Technical Outlook
Crude oil is still following a bearish channel, trading mostly beneath 53.10 regions.
Yesterday, the oil prices were testing the lower edge of a bearish channel, which pushed crude oil prices higher above 52.45.
On the lower side, the immediate support that crude oil faces are at 52, and under this oil price can drop to 51.35 areas.
Daily Support and Resistance
S3 50.19
S2 51.47
S1 52.21
Pivot Point 52.75
R1 53.5
R2 54.04
R3 55.32
The idea is to stay bullish above 52.75 to target 54 levels, while selling can be seen below 52.75 areas today.
Good luck!
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