Oil price plunged sharply overnight on the worst selloff since last September. Concerns over slowdown in global vaccination was a factor that triggered pull back in optimism over oil demand. More than a dozen European countries are still suspending AstraZeneca. Even UK, the best performer in vaccinations, warned over significant reduction in weekly supply from April, relating to manufacturing issue in India.
Technically, WTI’s failure to sustain above 65.43 structural resistance at this first attempt is not too surprising. A short term top should have be formed at 67.83 with breach of 59.17 support. Focus is now on whether WTI could hold on to the support zone between 55 day EMA (now at 57.97) and 59.17. If so, sideway consolidation should follow for the near term, to digest recent up trend, and build the base for another rally. However, firm break of 57.97/59.17 support zone would trigger deeper pull back to 38.2% retracement of 33.50 to 67.83 at 54.71 at least.
