WTI oil price eased below $49.00 on Friday after repeated upside rejections at $49.40/31 in previous two days and Thursday’s action being shaped in Doji, signaling indecision.
In addition, strong build in crude inventories last week added to pressure on oil price which was inflated by increased demand for oil on restart of Texas refineries which were shut on Hurricane Harvey.
Current easing could be seen as correction of larger bull-leg from $45.57 on overbought studies and ahead of attack at strong barriers at $49.62 (200SMA) and psychological $50.00 barrier.
Dips should be ideally contained by supports at $48.00 zone, provided by daily cloud top and Fibo 38.2% of $45.57/$49.40 upleg).
Focus is shifting to three other hurricanes that are approaching the US Gulf coast and may disrupt refining process again and reduce demand for oil again that would further boost oil prices.
Another supportive factor for oil price would be decision of Saudi Arabia to cut supplies in October by 350.000 barrels per day.
Res: 49.24; 49.40; 49.62; 50.00
Sup: 48.72; 48.50; 48.00; 47.65
