WTI oil remains in red at the beginning of the week and hit new marginally lower seven-month low at $62.51 on Monday, in extension of last week’s nearly 7% fall.
Oil prices maintain negative tone on pullback from recovery peak at $76.88 (03 Oct) and holding in red for four straight weeks, which resulted in 11.5% monthly loss in October.
Concerns about supply shortage on US sanctions to Iran faded as top oil producers increased output which covered all expected gaps and threatening on oversupply, as the US allowed major oil buyers to continue importing from Iran for some time.
In addition, comments from Tehran that it will continue to sell despite sanctions, further pressured oil prices.
Bearish signal was generated on Friday’s close below strong support at $63.57 (Fibo 38.2% of $42.04/$76.88 / 18 June low), suggesting that oil price could dip towards psychological $60 and Fibo support at $59.46 (50%).
Strong negative sentiment and bearish daily techs support scenario.
Corrective actions are expected to offer better selling opportunities and extended upticks should be capped under falling 10SMA ($65.41).
Res: 63.10, 63.93, 64.43, 65.41
Sup: 62.51, 61.80, 60.00, 59.46
