Oil price remains in red since 16 Mar recovery rejection at $49.61, threatening to fully retrace $47.08/$49.61 corrective phase.
Renewed concerns about global oversupply are offsetting OPEC’s attempts to curb production, with API report released on Tuesday, showing US crude inventories are rising faster than expected.
From technical point of view, oil price is under increased pressure. Tuesday’s bearish candle with very long upper shadow weighs heavily on the market that resulted in fresh bearish acceleration on Wednesday.
Loss of pivotal support at $48.05 (Fibo 61.8% of $47.08/$49.61 recovery leg) generated strong bearish signal, with subsequent weakness taking out $47.68 (Fibo 76.4%) and opening way towards $47.08 (14 Mar spike low, the lowest trade since 30 Nov).
US EIA crude inventories, due today, are closely watched for further signals. Forecast shows build of 2.80 million barrels, compared to previous week’s draw of 237K barrels.
Res: 47.83; 48.22; 48.73; 49.46
Sup: 47.41; 47.17; 47.08; 46.11
