Oil price eases as OPEC cuts forecasts for global oil demand growth, little help from upbeat inventories
WTI oil price dipped near $57.00 support, following brief jump to $57.91 after release of US crude stocks report.
EIA report showed much stronger than expected drop in crude stocks (-6.9 mln bls vs 2.6 mln bls f/c) but contract was sold after data, as report showed OPEC cut its forecast for growth in global oil demand in 2020, due to global economic slowdown that prompted traders to take profits.
Technical studies also contribute to fresh selling as Tuesday’s action ended in long-legged Doji, signaling indecision after strong rally from $52.82 started to lose traction and overbought daily stochastic turns south.
Reversal pattern is forming on daily chart, with today’s bearish close below 100 DMA ($57.32) needed to complete the pattern and signal deeper pullback from six-week high at $58.74, posted on Tuesday.
Firm break below $57.00 handle would risk towards key supports at $56.48/23 zone (Fibo 38.2% of $52.82/$58.74 / converging 10/200/55DMA’s).
While pullback holds above these levels, hopes for fresh upside attempts will remain in play, while break here would generate reversal signal and sour near-term sentiment.
Res: 57.91; 58.27; 58.74; 58.81
Sup: 57.12; 57.00; 56.48; 56.23