Crude oil prices were down 1.6% on the day on Thursday. The Energy Information Administration reported that demand for oil would be hit due to slowing global demand. This comes just days after the IMF cut global growth forecasts including key economies such as the US and the eurozone. OPEC is now mulling over raising production if Venezuela and Iran’s supplies fall further.
How Far Can Oil Prices Correct?
WTI Crude oil has clearly pulled back from the highs and formed a minor support level at 64.09 – 63.91 region. In the near term, oil prices could briefly retest this level. If resistance forms here, then we expect price to correct lower. The near term support is at 63.18. Price needs to rebound off this level in order to maintain the bullish momentum. There is scope for further upside. But a failure to stall the correction at 63.18 could trigger an even stronger decline to 62.06.
