WTI oil corrects Friday’s 3.1% drop, peace talks prospect and start of northern Iraq oil exports to keep pressure

WTI oil price bounced from new two-month low ($70) on Monday, on partial profit-taking from Friday’s 3.1% drop (the biggest daily loss since Nov 25).

Fresh bears cracked psychological $70 support and probed through the floor of the recent range, signaling that larger downtrend may resume after two-week consolidation.

Fundamentals are also expected to negatively impact oil prices as resumption of oil exports from northern Iraq and growing prospects of an end of the war in Ukraine, would provide further pressure on increased supply and decrease in geopolitical risks.

Bearish daily studies support the notion as negative momentum strengthens and MA’s are in full bearish configuration and formed several bear crosses (30/200; 20/55), along with two consecutive weekly candles with long upper shadows, which signal strong offers.

Clear break of strong supports at $70 / $69.90 (psychological / Fibo 76.4% of $66.98/$79.35) is needed to confirm signal of bearish continuation and unmask targets at $68.44 (Dec 20 trough) and $66.98 (Dec 6 low).

Meanwhile, correction should mark positioning for fresh push lower, with upticks to be capped under $71.70 zone (daily Tenkan-sen / broken Fibo 61.8%) to keep larger bears intact.

Res: 70.83; 71.49; 71.83; 72.75
Sup: 70.00; 69.41; 68.44; 67.69