Crude Oil Extends losses Despite Reports Of Output Shortage, Awaiting U.S Inventories
Crude oil extends the bearish momentum through out the week and has recorded $2.4 loss bp. On Monday, oil plunged to $46.12 low after clocking $48.15 bp high, and dipped further on Tuesday with $45.73 low.
Fundamentally, IEA reports showed that the U.S oil production lost 25% of its output momentum and 6M barrels drop. On the other hand, OPEC mentioned that Russian and Saudi Arabia has discussed extending previous deal for additional 3 months, but it has not been confirmed. Fundamentally, with the U.S shortage and Libyan Sharara filed closed, oil should rally as fear creeps into markets that global supply dropped.
Markets could witness the effect of the shortage in the coming weeks if not on the spot, But technically, the bearish momentum still overwhelms oil levels. Today, U.S Inventories which will be released at 2:30 PM GMT will give a better outlook on how oil will behave on technical level, since fundamentals that supports rallies has failed.
Crude Oil Technical Overview:
Trend: Down
Closing price: 46.44
Target: None
Trend reversal price: 47.70
Resistance levels: 46.78*, 47.09-20, 47.70*
Support levels: 45.85, 45.30-00 , 45.01
Comment: The market remains in breakout selloffs from congestion and could extend bear trending to reach within the 4575-25 zone. Look for attempts to continue selloffs, but a reluctance to extend under 4575- may trigger a reactionary rebound. A close over 4678* stops pressing bear forces, but only a close over 4770* highlights a reversing turnaround.