WTI oil extends weakness on Tuesday to new multi-month low at $58.24, maintaining strong bearish tone, following Monday’s 3% fall.
Brief recovery attempt on Monday was short-lived, with fresh acceleration lower sparked by President Trump’s request to Saudi Arabia and OPEC not to cut oil production, which Saudi Arabia signaled previous day.
The global oil supply is hitting its record and starts to dent market balance, which keeps oil prices in the downward trajectory.
Risk of further weakening is high, as steep downtrend extends into six straight week, registering fall of over 20% so far and showing no signs of changing direction, despite strongly oversold studies.
Strong bearish sentiment continues to drive oil price lower.
Fresh negative signals on Tuesday came from OPEC monthly report which points on widening excess supply in 2019, global oil demand growth would slow and cartel’s monthly output rose in Oct despite lower contribution from Iran.
These factors weigh heavily on oil price which approaches strong technical support at $57.47 (weekly cloud base), loss of which would generate fresh bearish signal for extension towards next pivot at $55.35 (Fibo 61.8% of $42.04/$76.88).
Focus turns towards US API and EIA crude inventories reports which will be released on Wed/Thu respectively (delayed due to US holiday) and expected to show another build in crude stocks which would add to oil’s negative sentiment.
Res: 59.33, 60.00, 61.27, 61.52
Sup: 58.24, 58.06, 57.47, 56.08
