WTI remains robust, but bearish bias persists while below 50% Fibo
- West Texas Intermediate crude, (WTI), for February, finished higher for a 4th session in a row, adding 55 cents, or 1.2%, to settle at $47.09/bbl.
- Oil was boosted by separate surveys proving monthly declines in crude output in an otherwise environment of weak risk appetite.
- Spot prices ranged between $45.61/bbls and $47.66/bbls, ending on the $47 handle.
Further to yesterday's positive settlements following a reported drop in December crude exports emerged from Saudi Arabia, the market is keeping abreast with the output declines that came into effect this year totalling 1.2 million barrels a day from October 2018 levels, pledged by members of the Organization of the Petroleum Exporting Countries, (OPEC), and nonmember producers, including Russia.
As for the latest production figures...
As for the latest figures, the OPEC produced 32.68 million barrels of oil a day in December, that was down 460,000 barrels a day from a month earlier, according to a Reuters survey released Thursday. Then, we also had the Bloomberg survey that showed OPEC output down by 530,000 barrels to 32.6 million barrels a day last month. Both surveys pegged the monthly declines as the biggest since January 2017.
However, a broader fear over a global economic slowdown is a headwind for oil prices while makes for a risk-off environment and lower stocks, making it a hard environment for bulls to make a significant impact on the charts.
The price is consolidating on the $47 handle with the convergence of several key 4hr moving averages between 45.70/90 and 46.50 as additional support. However, with the price still well below the 50% Fibo level of the 2016 lows to recent peak's range, a bearish bias should keep recoveries contained, especially while below the 76.4% retracement of the June 2017 lows and 2018 highs, with bears looking to 42.50.