There is a strong "bearish sentiment" on the oil market since the beginning of March. The WTI (#CL) futures have reduced by more than 10% during this time. The oil prices have reached the 47.00 USD support level. We can observe a flat (47.00-49.00 USD) currently.
The growth of petroleum resources reserves is expected according to the latest information from the US DOE and the API. We should keep in mind that the OPEC agreement that was adopted last year can’t give any support to the oil quotes now. The next meeting of this organization will take place on March 25-26. But in case it doesn’t take any strong measures, the downward trend may extend.
Another important event we have pay attention to is the report of Baker Hughes. It will be released on March 24, at 6:00 pm (GMT). If the data from the report announces the increase of drilling rigs, the minimal prices for the WTI oil may rise to 47.00 USD per barrel.
Technical analysis
Support level: 47.00 USD
Resistance levels: 49.00 USD, 51.50 USD, 54.00 USD
In the medium term we should expect the domination of sales on the "black gold market". Due to this fact I recommend opening short positions.
Source: tradingview.com
Conservative traders can wait for a correction to 50.0-61.8% (50.50-51.30 USD). After reaching this level, the entry points for selling oil could be found. Taking profit is likely to be at the 47.00 USD level.
Selling oil is possible after overcoming 47.00 USD as well. The price can move to 45.00 USD.
There may be a correction of #CL as well. The divergences of the MACD histogram and of the price have appeared. They indicate a possible reversal.
Aggressive traders will get an opportunity for opening counter-trend transactions, if the price overcomes the 49.00 USD local resistance. The price may move to the 50.50-51.30 USD zone in case of correction.
