Oil price slips further on dominating economic growth worries

WTI oil price fell for the second straight day, extending pullback from $83.51 top (2023 high, posted last week).

Fresh weakness emerges from persisting worries about further increase of US interest rates and darkened growth outlook, with much stronger than expected China’s GDP data being insufficient to improve negative near-term sentiment.

Investors are particularly concerned about the situation in the US, after the economy was shaken by the collapse of two banks and not fully convinced that the worst is over.

In addition, further tightening in the monetary policy is very likely and tighter credit conditions would further undermine economic growth, still fragile according to the latest US economic data.

Further pressure on oil prices comes from signals that Iraq is on the way to resume oil exports, which were stopped last month.

Technical picture on daily chart is bullish overall, but loss of bullish momentum suggests that the near-term action may stand at the back foot for some time.

Dips so far face strong headwinds at psychological $80 support, which marks the upper boundary of pivotal support zone between $80 and $79 (the latter marks Fibo 23.6% retracement of 64.34/83.51 rally and Apr 3 low when the market opened with nearly $5 gap higher.

Immediate bullish structure is expected to remain intact while the action holds above these levels, though deeper dips cannot be ruled out, mainly dependent on fundamentals.

Larger bulls won’t be significantly harmed as long as gap remains unfilled, with extended pullback to face solid supports at $77.00/$76.00 zone.

Broken 10DMA reverted to immediate resistance ($81.31), violation of which would improve near-term structure and open way for fresh attack at key barriers at $82.75/$83.51 (200DMA / Apr 12 peak).

Res: 81.31; 81.98; 82.75; 83.51
Sup: 80.00; 79.35; 78.98; 78.14