Oil extends steep fall into fourth straight day and hits two-month low
WTI oil holds firmly in red for the fourth straight day and fell to new two-month low $38.52) on Monday, following massive fall (4.36% on Friday).
Oil price fell over 8% in three days (Wed/Thu/Fri) with today’s extension lower marking so far the loss of 9%, as the sentiment soured on slowed imports from China in August.
The latest news that Saudi Arabia cut the October official selling price for Asia, its largest market by region, further weakened the sentiment.
Break of psychological support at $40 and weekly close below, added to growing negative signals about deeper correction after recovery phase from April’s low at $6.57 stalled, following repeated failure’s to clearly break above pivotal Fibo barrier at $43.05 (61.8% of $65.63/$6.57 fall).
Big bearish candle of last week, which marks the biggest weekly drop since mid-Apr, weighs on near-term action, along with bearish daily studies.
Strong support at $36.80 (base of thick daily cloud) comes in focus, with stronger bearish acceleration seen on break here.
US weekly crude reports, due on Tue/Wed are eyed for further signals.
Res: 39.52; 40.00; 40.30. 40.83
Sup: 38.52; 38.00; 37.49; 36.80