WTI oil price jumped towards $20 level in early US trading on Monday after opening lower at the beginning of the day and pulling back around $2 in Asia and Europe. Last week’s strong recovery is taking a breather after bulls failed to close above cracked psychological $20 barrier on Friday. Fresh fears among oil traders that US threats to impose tariffs on goods from China would further depress already weak demand due to coronavirus lockdown, weighed on oil prices on Monday. However, near-term sentiment is improving following last Tue/Fri 52% advance and traders are gradually building fresh longs, on hopes that the action of biggest world’s oil producers in cutting the output for additional 9.7 million bpd (as from May 1) would help. Studies on 4-hr chart are positive and dailies are improving, as momentum rose to the borderline of positive territory and renewed bulls probe again above falling 20DMA ($19.53). Fresh positive signals could be expected on close above 20DMA and $20 level, but expectations of V-shape recovery so far look unlikely, as the downside remains vulnerable due to current economic and political situation, after pandemic lockdown devastated global demand and threats of deepening US/China trade conflict signal that recovery attempts could be significantly impacted. Daily Kijun-sen ($17.81) holds the downside for the second day near-term action is expected to remain biased higher while the price holds above. Pivotal support lays at $16.14 (10DMA) and break her would neutralize bulls and risk retest of recent lows.
Res: 20.47; 21.40; 22.00; 22.33
Sup: 18.03; 17.81; 16.14; 15.48
