USOIL at $45.30 on bears sovereignty


WTI futures are down 4.8% at $45.43  further below the 8-month low seen on Tuesday is at $45.79. Investor risk aversion on concerns about global growth and the impact on crude demand have weighed on crude markets, even as OPEC has vowed further output cuts. WTI prices are now down by 11.3% from week-ago levels, and by 22.8% on the year-to-date.

The asset does not seem willing to present any correction to the upside either in short- or long-term time-frame. Not surprisingly, energy is the worst performing sector today, as crude oil prices reverse yesterday’s rally. The bearish bias on oil has been refreshed once again, as the asset moves southwards below 3-day Support at $46.00 level. The fact that the USOil returned 15-month gains, in 3 months, without being oversold yet, flags slower global growth and adds further pressures on stock and bond markets.

The break today of the fine Support at $45.50, raised expectations of the price deriving back to last year’s low at the $42.05. Immediate Support comes at July’s 2017 low at $43.75.

Daily momentum indicators are negatively configured once more, with MACD lines crossed below signal line amid a fresh negative momentum on USOil. RSI strongly supports the sustenance of negative outlook on USOil, as it moves close to the oversold barrier at 29 for the 4th consecutive day. Intraday Resistance sets at PP level for the day at $46.50, and next Resistance holds at $47.25.

WTI futures performance came in line with our November’s expectations:

“As the asset however reached and broke this barrier, the price action now looks decisive to continue the “free fall”…….Hence as the overall picture remains strongly negative, the next medium-term Support is around the 3-month lows during 2017 (May-July) and the 61.8% Fib. level, at $43.50-$45.50 area.”

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Andria Pichidi

Market Analyst


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