WTI oil price returned to red on Wednesday after bounce from Tuesday’s one-month low ($52.97), sparked by surprise drop in US oil inventories, stalled at $54.31. API report on Tuesday showed unexpected drop in US crude inventories (5.9 mln bls draw vs forecasted build of 1.4 mln bls) which partially offset negative impact from downbeat US Manufacturing PMI data that depressed dollar and global stocks. The WTI contract holds in red for the ninth straight day, pressured by concerns over global growth slowdown, with much faster production restore in Saudi oil facilities, damaged in attack last month, adding to negative outlook. Fresh weakness pressures cracked Fibo support at $53.47 (76.4% of $50.49/63.12), clear break of which would generate fresh bearish signal and add to bearish studies and sentiment. EIA crude oil inventories report is due later today (1.5 mln bls build f/c vs 2.4 mln bls build prev) and could provide fresh bullish signal on surprise drop in oil stocks. However, recovery action might be limited as near-term picture is firmly bearish and upticks will be seen as positioning for fresh downside. Daily cloud ($54.82/$55.73) marks solid resistance which guards a cluster of daily MA’s (between $55.87 and $56.78) and only firm break of both resistance zone would generate reversal signal.
Res: 54.31, 54.86, 55.31, 55.87
Sup: 53.47, 52.97, 52.75, 52.29
