WTI holds in green for the third day but recovery is still fragile
WTI oil extends recovery to one-week high on Thursday, holding in green for the third straight day and testing pivotal Fibo barrier at $17.88 (38.2% of $36.27/$6.52) reinforced by daily Kijun-sen.
Fresh optimism was sparked by lower than expected rise in US crude inventories and rising demand for gasoline.
Recovery attempts after oil prices nosedive and historical drop below zero, which many market participants believed is not possible, is still very fragile.
Global demand remains weak, the world is still flooded with oil and global storages are almost full that weighs on oil prices, along with concerns that OPEC+ decision to reduce output by 9.3 million bpd as from May 1, will not be sufficient to significantly improve the sentiment and stronger inflate oil prices.
Recovery needs to clear three important barriers to generate stronger bullish signal, with close above $17.88 Fibo level and $18.22 (former recovery high of 23 Apr) to open way for test of key $20 zone.
Caution is required as the downside remains highly vulnerable and another failure to break higher would increase risk of fresh weakness.
Res: 18.22; 19.24; 20.14; 21.05
Sup: 16.65; 15.48; 12.63; 11.86