WTI OIL trades in extended consolidation; lacks clearer n/t direction signal
WTI oil holds within narrow consolidation for the second day after falling sharply on Tuesday. Consolidation above correction low at $54.80 was so far capped by falling thick hourly cloud and shows no stronger signs of basing but remains above rising 20SMA (currently at $54.80) which marks pivotal support together with $54.53 (Fibo 38.2% of $49.09/$57.90 ascend).
Overall bullish daily studies and oversold slow stochastic are supportive for possible recovery, however, weakening momentum studies are limiting.
Oil price showed limited reaction on Wednesday’s weekly crude stocks data which came below forecast but still showed a draw in inventories despite wide expectations for crude stocks build.
Sentiment in improving on expectations OPE will extend its output cut program on 30 Nov cartel meeting, which could be positive factor for oil price.
Recovery needs lift above broken 10SMA ($56.28) to generate stronger bullish signal and neutralize downside threats.
Otherwise, fresh bearish acceleration could be expected on firm break below $54.80/53 pivots.
Res: 55.54; 55.82; 56.28; 56.75
Sup: 55.15; 54.80; 54.53; 54.02