WTI oil remains at the back foot and extends weakness to one-week low ($92.88) on Monday.
Oil prices are weighed by growing demand concerns as the US central bank is expected to make another big rate hike this week that threatens of further slowing of the global economy, with weaker China’s economic recovery (the latest data showed that China narrowly escaped a contraction in the second quarter) adding to worries that demand for oil would weaken.
Signals that Libya is boing to increase oil output to 1.2 million barrels per day would add to supply side and ease market tightness, marking an additional pressure on oil prices.
Also, the European Union said it would ease sanctions to Russian state-owned companies to sell oil to third countries that would further weigh on prices.
Fresh weakness broke through important support at $94.50 (Fibo 61.8% retracement of $90.54 / $100.96 / 200DMA) with sustained break here to generate fresh bearish signal and bring in focus key supports at $90.54/00 (July 14 low / psychological).
Daily technical studies remain in bearish setup and support the action, with additional negative signal developing on monthly chart as oil is on track for the second consecutive strong monthly fall, last seen in Mar/Apr 2020.
Res: 95.75; 96.52; 96.98; 97.92
Sup: 93.00; 91.62; 90.54; 90.00
