Oil price fell on Tuesday, marking fresh extension of steep downtrend from $53.80 lower top that was paused on Monday, for brief consolidation. Renewed weakness comes on comments from OPEC about oil inventories that continued to rise, despite the global deal to cut supply. OPEC countries agreed to curb their production by 1.2 million barrels per day from Jan 1, while non-OPEC producers agreed to cut half. Strong bearish sentiment that was established of recent sharp fall that also took out psychological $50 support, after holding above it for three months, now threatens of further weakness. Today’s acceleration is now firmly below $48.00 handle and pressuring next targets at $47.32/17 (Fibonacci 261.8% expansion of the wave C from $53.78, on which the price is currently riding/Fibo 61.8% of $42.19/$55.22 upleg). The wave could extend to its FE 300% at $46.38, possibly to $45.27 (Fibo 76.4% retracement) on strong bearish sentiment. Broken 200SMA ($48.71) that capped action on Monday/today, marks strong barrier and guards psychological $50.00 resistance (also daily cloud base), which is expected to limiti extended upticks.
Res: 48.71; 50.00; 50.82; 51.21
Sup: 47.32; 47.17; 46.38; 45.27
