Oil price holds in red on rising concerns about slowdown in demand
WTI oil holds in red for third straight day and retests cracked key Fibo support at $51.61 (61.8% of $42.36/$66.58 ascend).
Fresh weakness retraces the largest part of $50.59/$54.79 corrective action, which was capped by falling 10SMA on Monday.
Technical studies send mixed signals on MA’s in full bearish configuration; Stochastic heading south, but oversold RSI and north-heading momentum, suggesting that bears may show hesitation on approach to key support at $50.59 (5 June low), but will remain fully in play while holding below falling 10SMA (currently at $53.26).
Fundamentals, on the other side, significantly changed focus from supply side (OPEC+ production cut; US sanctions on Venezuela and Iran) towards demand, as fears of global recession increase concerns about drop in global demand for crude oil.
This may further pressure oil price, which holds near pivotal supports at $50.59/00 (5 June low / psychological support), loss of which would spark fresh bearish acceleration.
Strong rise in crude stocks (API report on Tuesday showed build of 4.8 mln bls vs 3.5 mln bls build previous week) and potential surprise on today’s EIA report (0.4 mln bls draw f/c vs 6.7 mln bls build previous week) would add to negative sentiment.
Res: 52.69; 53.26; 54.02; 54.67
Sup: 51.46; 51.23; 50.59; 50.00