Oil prices have continued to bleed due to demand concerns and the dollar’s strength which weighs on the commodity sector in general. The CRB index, comprising a basket of 19 commodities, with 39% allocated to energy contracts, is now below Dec 2017 support and the 179 handle. WTI is currently trading at $50.81, down from a high of $52.45 having made a low of 50.34. The expectations for a slowdown in global economic growth continues to weigh on the price of WTI that has been in a rout since the supply from early Oct highs of $74.78. There was very little let up since the price finally crashed below the support of the 38.2% Fibo around $66.60 within a series of down days until a low of %54.88 where the price tried to stabilise. However, due to ongoing demand concerns, bulls capitulated there, and we are now looking down the barrel of prices below the psychological $50 handle. Not all can be blamed on global growth concerns though, not at least considering the resurgence in the greenback of late. There are some factors in play supportive of the US dollar and the DXY is now trading way above the 61.8% Fibo of the mid-Nov decline to recent lows at 96.04 – The 61.8% Fibo level is 97.06 and a line in the sand. In today’s price action, the DXY has pierced the 78.6% Fibo to 97.50 as the NY session high. A combination of central bank divergence in favor of the Fed’s tightening path and geopolitical concerns are backing the mighty dollar which too is weighing on commodity prices, with the CRB index now trading below Dec 2017 support and the 179 handle – (Metal prices are also feeling the strain with both copper and iron ore making tracks to the downside). While global demand is a concern and a resurgence in the dollar plays on, analysts at TD Securities argued that weakness could start to bottom out as it appears OPEC+ are committed to cutting production once again at their Dec 6th meeting, “which should see the market tighten up”. CFTC Weekly Report (W/E Nov. 20) “WTI crude oil specs heavily reduced positioning again last week, as investors continued to capitulate on their long positions. Crude oil continued its aggressive descent lower amid news of record output from Saudi Arabia, further bearish macro sentiment and continued builds in US inventories. Furthermore, seasonal inventory dynamics should start to see barrels draw again and sour macro sentiment is likely overblown “” as such, we anticipate that crude oil will begin to move closer to the fundamentals once again as we move into 2019m” – the analysts at TDS explained. WTI levels There is some divergence in daily and weekly RSI where the price is making fresh lows but RSI is not. This could lead to a stabilisation in the bear leg and signals a likely correction ahead of the $50 psychological target before a breakdown in price that could otherwise see levels last seen in early summer 2017 – The 123.6% Fibo extension of the 2018 range is located down at circa $44 – That is close to May 2017 lows. On a correction, the 200-W SMA at 52.10 will be targetted ahead of $56.40 as the 23.6% retracement level of October’s downtrend. FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street FXStreet News share Read Next Italy’s Salvini: Will do all we can to avoid EU disciplinary action FX Street 4 years Oil prices have continued to bleed due to demand concerns and the dollar's strength which weighs on the commodity sector in general. The CRB index, comprising a basket of 19 commodities, with 39% allocated to energy contracts, is now below Dec 2017 support and the 179 handle. WTI is currently trading at $50.81, down from a high of $52.45 having made a low of 50.34. 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