Bears are taking a breather in early Thursday’s trading after a strong fall in past two days (down 5.5%), as oil prices were deflated by growing fears of US recession and strong rise in Russian oil exports, which hit the highest since 2019.
Russia increased production to meet strong rise in demand from India and China which offset the impact from the recent surprise decision of OPED+ group to further cut the output.
Oli price came under increased pressure after loss of pivotal supports at $80 and $79.00, with fresh acceleration lower, turning technical studies on daily chart to bearish setup and adding to negative near-term outlook.
Bears found a temporary footstep at $73.93 Fibo support (50% retracement of $64.34/$83.51 rally) and ahead of the top of thick daily cloud at $73.49, with oversold conditions suggesting a pause in the latest bear-leg from $79.15 (Apr 24 lower top).
With fundamentals remaining negative for oil, technical buying on partial profit-taking, may keep bears on hold for consolidation / mild correction.
Solid barriers at $76.19/73 (broken Fibo 38.2% / 100DMA) should ideally cap, with stronger upticks not to exceed falling 10DMA ($78.29) to keep bears in play.
Fresh bears also filled the gap of Apr 3, adding to negative signals, although firm break of $73.93 level is needed to confirm the signal and open way for attack at next targets at $71.66 (Fibo 61.8% of $64.34/$83.51) and $70.00 (psychological).
The WTI contract is also on track for the second consecutive weekly loss, which contributes to negative near-term structure.
Res: 74.80; 75.69; 76.19; 76.73.
Sup: 73.93; 73.49; 72.18; 71.66.
