WTI oil stands in red on Wednesday on fresh negative sentiment, sparked by stronger than expected build of crude stocks and rising fears about potential global trade war. Oil price closed in red on Tuesday after attempts to extend strong rally from Monday were strongly rejected at $63.26, leaving daily candle with long upper shadow, which was initial bearish signal. API weekly crude stock report, released late Tuesday, showed unexpectedly strong build in crude inventories by 5.66 million barrels, more than double of forecast for build of 2.7 million barrels. Oil price extended weakness to $61.78 on Wednesday, driven by negative sentiment, but dips were so far short-lived as the price bounced back above cracked Fibo support at $62.06 (38.2% of $60.12/$63.26 recovery). Fresh easing weakened near-term structure as daily MA’s (10/30/55) turned to bearish setup and momentum dipped to the border of negative territory, threatening of further weakness, which could be triggered by stronger than forecasted build of weekly crude stocks from EIA report (due later today) and close below cracked Fibo support at $62.06. Bearish scenario would look for Fibo levels at $61.69 (50%) and $61.32 (61.8% of $60.12/$63.26) which guard the base of thick daily cloud at $60.91. Bullish scenario sees minimum requirement on bounce above 30SMA ($62.56) to ease immediate downside risk, however, extension above Tuesday’s high at $63.25 is needed for attack at daily cloud top at $63.49, which marks upper pivot.
Res: 62.28, 62.56, 62.77, 63.25
Sup: 62.06, 61.78, 61.69, 61.32
