Consolidation under new high awaits US data for fresh signal
WTI oil price remains constructive and holding near five-month high on Wednesday, despite Tuesday’s Doji candle which signaled indecision.
Tightening supply on fresh concerns about the situation in Libya, OPEC production cut and US sanctions on Iran and Venezuela, keep oil prices well supported, but bulls may lose grip on renewed concerns about widening trade conflict and global economic slowdown.
Strongly overbought daily studies also point to correction, although without firmer negative signal for now, but overall strong bullish structure suggests that the price adjustment is likely to precede fresh advance.
Broken Fibo barrier at $63.69, reinforced by rising 5SMA marks initial support, with dips expected to find ground above rising 10SMA ($62.49) and keep bulls intact.
Key support lays at $61.26 (200SMA) and only break here would sideline bulls for deeper correction.
US crude stocks unexpectedly rose by 4 mln bls, compared to last week’s 2.9 mln bls build, API report showed on Tuesday.
EIA US crude inventories report is in focus today (2.2 mln bls build f/c vs previous week’s 7.2 mln bls rise) and another surprise rise would increase pressure on oil prices.
Res: 64.77; 65.00; 65.37; 66.85
Sup: 64.03; 63.69; 63.12; 62.49