WTI Oil holding firmly below $70 on growing fears of deeper crisis in financial world
WTI oil price remains in red on Thursday but so far holding above 15-moth low ($65.69), posted after Wednesday’s sharp acceleration lower.
Existing negative sentiment was additionally soured by news that Credit Suisse Bank asked for a massive financial support from the Swiss National Bank, fueling growing fears of broader instability in global banking sector after a collapse of two banks in the US last week sent an initial shockwaves through financial world.
Oil price is in a steep downtrend since Mar 7 on demand concerns, as most of developed economies are showing signs of slowdown and recession, while optimism from strong growth of China’s economy in post-Covid period, proved to be insufficient to offset negative impact on oil price.
Wednesday’s break below psychological $70 level (the first since late December 2021), further weakened the structure, as WTI contract is on track for the biggest weekly fall in 2023 (down over 12% so far).
Bears broke below pivotal Fibo support at $68.50 (50% retracement of larger $6.52/$130.48 rally), which added to negative signals from firmly bearish technical studies on daily and weekly chart.
Temporary footstep was found at $66.14 (200WMA), though consolidation above this level is likely to be very limited, despite oversold conditions on daily chart, as the price action is currently driven mainly by fundamentals.
Loss of 200WMA support would risk test of a higher base at $61.80 (mid-Aug 2021) and psychological $60 support in extension.
Potential upticks would be mainly seen as positioning for fresh weakness and should be capped by strong resistances at $70.00/$72.50 (psychological / 200MMA) to keep larger bears intact.
Res: 68.50; 70.00; 72.50; 73.77
Sup: 65.69; 62.42; 61.80; 60.00