Recovery shows signs of stall at $18 zone, keeping the downside vulnerable
WTI oil fell about $2 on Friday after two-day recovery stalled at $18 zone (Fibo 38.2% of $36.27/$6.52 / daily Kijun-sen).
Oil price rose on fresh optimism on already agreed OPEC+ 9.7 million bpd production cut and signs that main oil exporters may further reduce the output, with Kuwait announcing immediate cut without waiting for the official start of the deal on 1 May.
However, the sentiment remains negative as production cut at current size proved to be too little to make stronger positive impact on attempts to rebalance oil market.
Also, around 30% slump in global demand resulted in filling up storage space that continues to strongly weigh on oil price.
Recovery needs break above $18 zone to generate initial bullish signal which would be verified on regain of next significant barriers at $20 zone.
Otherwise, the downside is expected to remain vulnerable and current action would signal positioning for fresh weakness.
Res: 17.88; 18.22; 19.24; 20.00
Sup: 15.62; 13.54; 13.31; 10.22