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WTI looking for a bearish close below 76.4% Fibo at $50.20

  • Oil is on the backfoot as the DXY firms up on Monday and is extending its losses, failing to stabilize after a weekly loss.
  • WTI is currently trading at $50.49 having fallen from $52.35 London highs to a low of $50.18.

Speculative longs continued to unwind last week and on Monday with data that reportedly revealed a jump in crude stocks at the U.S. storage hub. Genscape reported that Cushing, Okla., crude inventory rose by 630,000 barrels last week, which was more than expected.

As per futures, WTI dropped 64 cents, or 1.3%, to $50.56 a barrel on the New York Mercantile Exchange while February Brent LCOG9, was down 22 cents, or 0.4%, to $60.06 a barrel on ICE Futures Europe. The U.S. oil-rig count fell to its lowest since mid-October, reflecting pressure on shale oil prices. Net-long positions were cut further to less than 100,000 contracts last week. Traders now await the EIA that will release its monthly Drilling Productivity report which will include a forecast on U.S. shale oil production for January.

WTI levels

  • Support levels: 50.72 49.97 48.78
  • Resistance levels: 51.92 52.68 53.87

Candlesticks on the weekly charts stay directionless, although the near-term outlook leans bearish. Daily and 4hr RSI heads lower towards 30 and DMI is pinned down. A close below the 76.4% Fibo retracement of the June 2017 to date range is the immediate objective; this is located at 50.20.  A break towards the 123.6% Fibo extension target comes in at the 43.90s. The June 2009 lows are nearby at 41.83. On the flipside, bulls need a close above R1 at 54.19 on a spot basis to leave prospects open for a test of R3 at 57.06. First, the 61.8% will need to give at 61.8% which is located above the Dec highs of 54.70. 

 

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