During Wednesday’s Asian trading hours, WTI crude oil prices were flashing red and drew offers around below mid-$38.00 level while representing 0.20% losses on the day mainly due to the downbeat China data. Additionally, the ongoing tussle between the UK and the US against China also exerted some downside pressure on crude oil prices. At this particular time, WTI crude oil is currently trading at 38.38 and consolidating in the range between 38.00 and 38.62. However, the downbeat China data overshadowed geopolitical tensions in Libya.

West Texas Intermediate (WTI) futures dropped 68 cents, or 1.8%, to $38.26 a barrel, having risen approximately 2% in the previous session. It should be noted that Libya’s National Oil Corporation still found itself on the force majeure mode, possibly due to the domestic geopolitical crisis. During the early Asian hours, the European leaders, including those from France, Germany, Italy, and the European Union, keenly pushed opposing parties in Libya to agree on a ceasefire quickly.

On the other hand, the reason for the downward pressure in crude oil could also be attributed to the declining optimism levels over the global economic recovery from COVID-19 triggered by the increasing number of daily global cases of coronavirus, which indicates the second wave of cases and exerts some more strain on the already-fragile demand recovery.

Daily Support and Resistance

S1 34.46

S2 36.71

S3 37.53

Pivot Point 38.96

R1 39.78

R2 41.22

R3 43.47

US oil is forming a bullish setup as its values hold above 38.16 support level. 50 EMA is also supporting the buying trend in oil along with an upward trendline, which can be seen in the 4-hour timeframe. On the higher side, the next resistance stays at 39 and 39.40 today.

Good luck!