USOil, H1 & Daily
US Oil prices have traded under $50.00 for the first time since October 2017 today. Front-month futures pushed to a 14-month low at $49.40. Concerns about a supply glut remain dominant in market narratives, especially with Putin having sounded nonchalant about prevailing levels and prevailing price action, and despite expectations for OPEC members to agree on new supply quotas at the group’s upcoming meeting. USOil prices are over 7.5% down from week-ago levels, and 24.6% from month-ago levels, the biggest magnitude of losses during similar time frames since 2014.
As the key psychological low of $50.00 per barrel was broken, Reuters reported that “Russia is becoming increasingly convinced it needs to reduce oil output in tandem with OPEC but is still bargaining with the producer group’s leader, Saudi Arabia, over the timing and volume of any reduction”. The price recovered to $51.00 and the daily pivot, almost immediately. R1 sits at $51.80 with S1 down at the 14-month low.
The daily chart broke the key 20-day moving average on October 11 and the trend has been rolling down ever since, 35 trading days to date. The $50.00 level is the current line in the sand. The higher time frame weekly and monthly charts have support at $45.48 and $42.00 respectively.
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Head Market Analyst
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