WTI crude oil dropped sharply overnight, losing more than -4% and falling to its lowest level since last December. A combination of bearish factors contributed to this steep decline. The 70 psychological level is now critical for support, and if broken decisively, it could lead to an accelerated drop toward the 2023 low of around 63.
The decline was triggered by news that Libya’s rival governments may reach a deal to restore disrupted oil production. Oil prices were already facing downward pressure as OPEC+ prepares to increase output in the coming weeks. Further fueling concerns, weak US ISM manufacturing data, along with China’s disappointing Caixin PMI release earlier this week, raised demand worries for oil.
From a technical perspective, WTI remains bearish as long as the 72.57 resistance level holds. The falling trendline support at 69.47, near the 70 psychological level, is the key area to watch. A decisive break below this level could trigger further downside momentum.
Technically, near term outlook in WTI would stay bearish as long as 72.57 supported turn resistance holds. Falling trend line support (now at 69.47), which is close to 70 psychological level, is the key level the defend. Decisive break there could trigger downside acceleration.
Price actions from 95.50 (2023 high) are seen as the second leg of the pattern from 63.67 (2023 low). Fall from 87.84 is the third leg of the decline from 95.50. Any downside acceleration below the mentioned channel support could easily push WTI to 63.67/67.79 support before bottoming.
