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WTI prone to trade risks, stalled at 61.8% Fibo level

  • WTI has stalled at that  61.8% Fibo level around 57.30.
  • Trade war noise a key driver.

Despite recovering a portion of Thursday’s losses, oil prices saw their worst weekly performance of the year. Spot prices in WTI embarked on the 59  handle with  stock markets  dictating price action on Friday following a rebound in risk appetite on the back of noise that Trump may ease up on restrictions against Huawei Technologies Inc. as part of a bigger trade deal with China.

Meanwhile, the domestic supply story in the US has increasingly diverged, with inventories continuing to grow sharply, particularly as refinery outages have kept crude intake low despite high crack spreads, analysts at TD Securities explained.  “This has continued to strengthen our view for a widening in Brent-WTI, which has blown out beyond $10/bbl for the first time since June 2018, but we note that these refinery outages are likely to subside given the high incentive prices held by refineries.”

WTI levels

WTI has stalled at that  61.8% Fibo level around 57.30 following a collapse below the 50/200 DMA cross-over coinciding with the 23.6% Fibo, late Dec-late April range, and ascending channel support. However, on a continuation of the downside, 54.50 and the 50% retracement of 2019 range come in next ahead of the 200-W MA down at 52.40 and then the 38.2% Fibo and Feb lows at 52.50/51.40 respectively. On the upside, and on a break above 59, then through 60.40, as the 50% mean reversion of the 20th May weekly stick’s range, opening 60.80, the 17th May low of 62.51 and 26th Aprils lows at 62.26 will be a focus.  

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