WTI oil bounced from new low at $52.76 (the lowest since late Oct 2017) on Wednesday, after falling nearly 7% on Tuesday (the biggest one-day fall in Nov). Tuesday’s fresh bearish acceleration completed short-lived $54.74/$58.14 correction and signaled continuation of broader downtrend. Oil prices remain under strong pressure on global oversupply concerns and fears on signs of global growth slowdown, which could have negative impact on demand. Adding to negative outlook was rise in output, as the US became top producer with daily output at record 11.5 million bpd, with little help seen so far from talk about output cut by the biggest world oil producers. Today’s bounce was inspired by profit-taking, surprise fall of US crude stocks (API report showed draw of 1.5 million barrels after previous week’s build of 8.7 million barrels) and statement from US President Trump in which he signaled that the US won’t take stronger action against Saudi Arabia over the case of murdered Saudi journalist. However, outlook remains weak as key factors that keep oil price pressured continue to dominate, along with rising uncertainty in oil market due to economic environment as well as political risk. EIA Crude Stocks report is in focus today (2.5 mln bls build f/c vs 10.2 mln bls build last week) which could further boost oil prices on surprise, while release at above forecast would bring oil prices under renewed pressure. Extended recovery needs to stay below falling 10SMA ($56.95) to keep bears intact for fresh downside which could stretch towards psychological $50 support. Only sustained break above 10SMA would provide temporary relief and signal stronger recovery.
Res: 54.83; 55.26; 56.96; 58.14
Sup: 53.38; 52.76; 51.98; 50.26
