Oil price is losing traction on Thursday and eases after bumpy ride on Wednesday, when oil initially dipped to new 3 ½ week low at $62.05 and bounced to $63.62 on upbeat US crude inventories data.
EIA report showed weekly crude inventories surprisingly fell by 4.6 million barrels, compared to forecast for 1.4 million barrels build.
Recovery proves to be short-lived as other factors continue to have negative impact on overall sentiment.
Rising US shale oil production and the output from Russia, the biggest oil producer, weigh heavily on efforts of key world oil producers to end global supply glut and stabilize oil market, keeping oil price volatile.
Fresh weakness on Thursday dents again daily techs which still hold in overall bullish setup and threaten renewed attempts through cracked key support zone between $63.15 and $62.56 (20/55/30 SMA’s/Fibo 61.8% of $60.11/$66.53 ascend) loss of which would be strong bearish signal.
Otherwise, hopes of fresh recovery attempts would remain in play while those supports hold. Such scenario requires close above $63.76 (Fibo 38.2% of $66.53/$62.05) which capped the action in past two days and today and extension to 10SMA ($64.29), break of which would confirm reversal.
Res: 63.76, 64.29, 64.82, 65.40
Sup: 63.11, 62.80, 62.56, 62.05
