WTI Crude Oil Prices Dropped By 30% – Saudi Arabia Cut Its Official Selling Prices
Arslan Butt • 1 min read
At the starting of the Asian session today, WTI crude oil prices dropped nearly 30% after Saudi Arabia cut its official selling prices and set plans for a new increase in oil production next month, starting a price war even as the spread of the coronavirus erodes global oil demand growth.
WTI crude oil prices dropped by as much as a third following Saudi Arabia’s move after Russia refused at making a further steep output cut proposed by OPEC to maintain oil markets after being hit by worry over the economic impact of the coronavirus. US West Texas Intermediate (WTI) crude fell by $11.88, or 29%, to $29.40 a barrel, after touching $27.34, also the lowest since February 12, 2016. The US benchmark was potentially heading for its biggest decline on record, surpassing a 33% fall in January 1991.
Daily Support and Resistance
Pivot Point 42.88
The technical side of crude oil is heavily bearish, falling from $46.16 to $27 and then recovering to trade at $35. For now, WTI crude oil is likely to maintain the same pace. Overall, the RSI is extremely oversold, and chances of a bullish correction remain strong.
WTI can retrace back until 38.2% Fibonacci retracement to 35.50. We can consider taking another sell position below 35 with a target of 29.70. Good luck!