WTI oil price bounced from Asian session low at $52.14, but still hold away from Tuesday’s high at $54.54, where near-term recovery was capped by falling 20SMA, with subsequent pullback marking strong rejection.
Tuesday’s close in red with long upper shadow on daily candle could be negative signal, as the sentiment was soured by renewed concerns of global growth slowdown and US supply glut.
The API report, released late Tuesday, showed fresh build in US crude stocks by 5.36 mln bls, above previous week’s rise by 3.45 mln bls, adding to negative signals.
Focus turns towards release of US EIA crude stocks report which was postponed to Thursday (0.94 mln bls draq f/c vs 3.57 mln bls build previous week) which could provide fresh signal. Another key event, OPEC meeting is due on Thursday, with strong expectations that the cartel and Russia would confirm their decision to start cutting the output in order to stabilize oil market.
Near-term price action is holding between broken 10SMA ($51.90) which marks support and 20SMA ($54.44), marking pivotal barrier.
Bears on daily techs started to lose traction on initial reversal signals, but flat momentum lacks support.
Sustained break above 20SMA would generate bullish signal for further recovery.
Alternatively, loss of 10SMA support would weaken near-term structure, but filling Monday’s gap would provide stronger negative signal for renewed probe below cracked psychological $50 support.
Res: 53.40; 54.44; 54.80; 55.83
Sup: 51.90; 51.46; 50.64; 50.00
