During Thursday’s Asian trading hours, WTI crude oil failed to extend its previous day gains and dropped sharply by 1.96% to $36.56 on the day mainly due to the fear of oversupply triggered by the report that Saudi Arabia, Iraq, Kuwait, and the United Arab Emirates were not planning to continue with deeper voluntary oil production cuts beyond June. On the other hand, the upbeat market sentiment triggered by the US’s receding tensions proved to be one of the key factors that kept a lid on any additional losses in oil, at least for now.

At press time, WTI crude oil prices are currently trading at 36.52 and consolidating in the range between 36.37 and 37.09. Saudi Arabia and Russia have agreed to support extension in the supply cuts by 9.7 million barrels per day (bpd) in July, which was backed in April by the OPEC+ group, comprised of the Organization of the Petroleum Exporting Countries and other major producers. Unfortunately, they failed to agree on holding an OPEC+ meeting on the day to discuss the cuts, with OPEC sources saying that it would be conditional on countries to comply with the target of deepening their cuts.

Moreover, the selling bias in oil prices could also be attributed to the surging fuel stockpiles and mixed demand data in the United States triggered by the fears about a slow recovery in US demand after the coronavirus lockdown. At the US-China front, the long-lasting tussle between the United States and China is showing no sign of slowing down. The US halted Chinese airlines’ flights to enter into US effective from June 16 after China stopped American carriers from re-entering which recently fueled the ongoing tussle and exerted some downside pressure on oil prices.

Daily Support and Resistance
S1 32.65
S2 34.87
S3 35.88
Pivot Point 37.09
R1 38.1
R2 39.3
R3 41.52

WTI crude oil is trading with a neutral bias around 36, and bearish breakout of this level can help us capture quick selling until 35.45 and 34.60 level while support holds around 34.60. On the higher side, the resistance is at 37.15. The 50 EMA is supporting a bullish bias as it holds around 34.60 but there’s a big room for selling in crude oil. Let’s look for buying trades over 36.55 and selling below the same level today.
Good luck!