Oil price moved higher on Tuesday, retracing a part of Monday’s strong fall (oil price was down 3.2% in the biggest one-day fall since 07 Feb).
Oil price came under pressure on concerns over increased Russian output which offset positive impact from slowdown of US oil production.
Two-legged pullback from $66.53 peak found footstep at $62.80 and was contained by rising 30SMA.
Subsequent bounce was so far mild and limited by thick 4-hr cloud (spanned between $63.32 and $65.15), expected to keep bearish bias while cloud base caps.
Signals of stronger recovery action require penetration of 4-hr cloud and regain of next pivot at $64.22 (Fibo 38.2% of $66.53/$62.80 fall)which would improve near-term picture.
Bearish scenario requires early recovery rejection and fresh weakness through key supports at $62.75 (30SMA) and $62.56 (Fibo 61.8% of $60.11/$66.53 rally) which would generate strong bearish signal.
Focus turns towards release of US API crude stocks report, due later today, which would provide fresh direction signal.
Last week’s surprise build of crude inventories put oil price under strong pressure, which could be likely scenario if today’s report shows further increase of crude stocks.
Res: 63.68, 64.22, 64.66, 65.11
Sup: 62.75, 62.56, 62.00, 61.63
