Fresh demand concerns and unexpected rise in crude stocks weigh on oil prices
WTI oil price fell on Friday on fresh concerns that new pandemic restrictions in China will limit fuel demand in the world’s biggest oil importer.
Recovering fuel demand in China in the second half of 2020 strongly lifted oil prices, but fading hopes of further demand recovery on fresh restrictive measures decelerate recovery and threaten of pullback if sentiment sours further.
Larger bulls hit new 11-month high (53.91) previous week, after cracking key barrier at $53.23 (200WMA), but faced strong headwinds here, being on track for repeated failure to register weekly close above 200WMA.
This may weaken the structure, as bull-trap pattern is forming on weekly chart, while monthly action is shaped in Doji candle and signaling indecision.
Initial supports at $51.68/22 (broken Fibo 76.4% of $65.63/$6.52 / bull-trendline off $33.61 low) so far hold, but break lower would generate initial bearish signal for deeper pullback.
US weekly crude inventories rose unexpectedly by 4.35 million barrels, compared to forecasted draw of 1.1 million barrels that may additionally weigh on oil prices.
Res: 53.23; 53.79; 53.90; 54.62
Sup: 51.68; 51.22; 50.96; 50.00