WTI price establishes below $50 on rising pressure over fears of coronavirus pandemic
The WTI oil’s near-term action remains firmly in red and extends steep fall into fourth straight day.
Today’s break below psychological $50 level and former low at $49.41 (4 Feb) pushed oil price to the lowest levels since early January 2019.
Growing fears of coronavirus pandemic and its strong negative impact on global oil demand keep oil price under increased pressure and risk further fall.
Optimism over OPEC+ action in increasing production cut, so far provided little support to oil price, with market focusing on the outcome of group’s meeting on 5/6 March.
Daily studies show rising negative momentum and MA’s in full bearish setup that maintains negative tone, with close below $49.41 to confirm.
Bears could extend significantly if situation with coronavirus deteriorates as there are no obstacles until $46.46 level (Fibo 61.8% of $27.71/$76.78, Jan 2016 / Sep 2018 ascend).
US crude stocks are expected to rise further (API report on Tuesday showed build of 1.3 mln bls with Government’s report (EIA) due today and forecasted to 2 mln bls build compared to last week’s 0.4 mln bls rise.
Higher than expected results on today’s release would further depress oil price.
Broken $50 level now marks initial resistance, with extended upticks to stay under falling 20DMA ($51.47) and keep bears in play.
Res: 50.00; 50.45; 50.64; 51.47
Sup: 49.03; 48.75; 48.18; 47.42