WTI oil eventually broke below psychological $50 support and hit new 2018 lows on Thursday, in extension strong fall previous day, generating strong signal of continuation of larger downtrend which took a breather above $50 pivot.
The overall sentiment remains firmly bearish and so far, there were no factors that could more significantly impact bears.
Rising fears on global oversupply and projections which see lower demand in 2019, along with concerns about escalation of trade conflict, keep oil prices under strong pressure.
Comments that OPEC and Russia may start reducing the output in order to stabilize global oil market, showed mild and short-lived impact and traders expect to get more clues about the action on week’s cartel’s meeting.
Focus turns on tomorrow’s G20 meeting in Argentina, with important events for oil being Trump/Xi meeting regarding trade conflict, as well as meeting between presidents of the US and Russia.
US President Trump favors lower oil prices, while Russia and Saudi Arabia want to push oil prices higher.
Sustained break below $50 support would be strong bearish signal for traders, as bears broke below 50% of 2016/2018 $26.04/$76.88 rally and could extend towards next key support at $45.46 (Fibo 61.8% of $26.04/$76.88).
Falling 10SMA (currently at $53.04) which tracks descend since early Oct, marks pivotal resistance and only firm break here would sideline bears.
Res: 50.00, 50.29, 51.02, 52.53
Sup: 49.40, 49.10, 48.58, 47.65
