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Technical Outlook: WTI Oil Eases Further Following Brief Consolidation On Tuesday, EIA Report In Focus Today

WTI oil price fell to new three-week low at $63.03 on Wednesday, signaling continuation of steep decline from $66.28 on Fri/Mon, which was interrupted by consolidation phase on Tuesday. Fresh weakness probes again below cracked daily Kijun-sen ($63.46), looking for fresh bearish signal on close below. Pivotal support at $62.50 (Fibo 38.2% of $55.81/$66.64 upleg) is coming in focus and break here is needed to signal deeper correction. Scenario is supported by daily 10/20SMA’s in bearish setup and momentum entering negative territory. API report on Tuesday showed a 1.05 million barrels drop in crude inventories, against expected build of 2.5 million barrels. Focus turns towards today’s release of EIA crude stocks report which is forecasted for 3.18 million barrels build, the second increase in crude inventories (after last week’s 6.77 million barrels build) following ten straight weeks of draws in crude stocks. Negative numbers today (further increase in oil stocks) would add on persisting pressure on oil prices due to recent strong fall in global stocks and rising fears on steady increase in US oil production which increased nearly 20% since mid-2016 and threatening to further distract efforts from major oil producers to stabilize oil market by reducing output.

Res: 63.46, 64.16, 64.46, 64.72
Sup: 63.03, 62.83, 62.50, 61.79

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