During the previous week, WTI crude oil recovered after dropping to $7.50 previously. For now, prices are holding around 16.85 level, right below the next resistance level of 17.55, which marks the 61.8% Fibonacci retracement. Bullish crossover of 17.55 level can extend bullish trend until 20.75 level. On the lower side, immediate support holds around 14.70 level today. Bullish bias will be more substantial above 17.55 and bearish below the same.

Most of the experts are saying that these OPEC+ output cuts will not be sufficient to tackle market conditions produced by coronavirus-led demand destruction and the rise in inventory levels. But there is the expectation that the output cuts may stop sharp declines and put a floor under the prices.

The best way to boost the oil prices is the recovery in demand, and it is only possible when lockdowns are scrapped and industrial activity start or a generous and unprecedented production cut is implemented, in addition to what OPEC+ decided.

Last week, US senators passed a nearly $500 billion bill for relief from the pandemic, providing support to small businesses and hospitals. The package raises US spending on the crisis to nearly $3 trillion. Moving on, the demand disruption caused by the coronavirus is set to drive the most precipitous fall in global GDP since the Second World War, with economists forecasting a 5.5% contraction in global economies this year, dwarfing the 0.5% fall seen during the global financial crisis in 2008.

Daily Support and Resistance

S1 2.33

S2 8.26

S3 11.59

Pivot Point 14.2

R1 17.53

R2 20.14

R3 26.08

WTI crude oil prices are facing an immediate resistance around 17.70 area. Violation of this level can extend bullish bias until the next resistance area of 20.75 and 23. However, the overbought US Oil may exhibit a bearish retracement until 23.6% and 38.2% Fibonacci retracement levels of 14.80 and 13.09, respectively. Bearish bias can be seen today. Good luck!