WTI oil price stands at the back foot on Monday and eased below $57 in European session after Friday’s Doji candle signaled that three-day recovery might be running out of steam.
Oil prices regained ground after being down 25% in past one and a half month, on comments that main oil producers from OPEC and Russia may reduce the output towards the end of the year, in order to stabilize oil market.
Saudi Arabia initiated plan of reducing production and Russia generally agreed, but markets await OPEC meeting on 06 Dec to get further information.
On the other side, oil prices were under strong pressure on fears of global oversupply, with additional negative signals on the impact from US sanctions on Iran, which proved to be not as strong as expected, as the US granted waivers to some of Iran’s customers to extend oil imports after sanctions were imposed.
Also, persisting trade conflict between the US and China which threatens to lower global demand if the conflict escalates, continues to weigh.
Current move so far looks like correction on strongly overextended daily techs and partial profit-taking, which so far holds below pivotal falling 10SMA barrier ($58.46) and keeps the downside vulnerable. Sustained break above 10SMA is seen as initial requirement for firmer recovery signal, with extension through next pivots at $61.93 (falling 20SMA) and $63.20 (Fibo 38.2% of $76.88/$54.74) needed to confirm reversal and signal stronger correction of $76.88/$54.74 fall.
Res: 57.53,58.14,58.46,59.33
Sup: 56.73,56.11,55.57,55.35
