- WTI is extending its recovery from the $54.74bbls lows, currently trading at 56.50 from a low of $56.21bbls and to a high of $56.56bbls.
- The price has proven its fragility at the trend-line support est.11th Feb and bulls tread with caution.
Crude oil prices ended the week on a sour note, but have at least made a recovery with a strong rejection from the bulls no the downside. Prices have been falling sharply on concerns of weak demand after weak economic data.
Analysts at ANZ Bank explained that coupled with the US monthly jobs report showing hiring at its weakest in more than a year with a poor global growth outlook exacerbated by a slump in Chinese exports whereby the 20.7% fall in exports was the biggest fall since February 2016, has raised concerns about the impact that the trade tensions are having on the global economy:
“These issues outweighed the impact of data showing a slowdown in US drilling. The number of rigs drilling for oil in the US fell by nine to 834, according to Baker Hughes data. This is the third straight week of declines. A key oil services company warned that they expect cuts to drilling activity after a number of oil producers trimmed their spending outlooks for 2019.”
The price has proven its fragility at the trend line support est.11th Feb and the support is now wider, shifted to the lows on Friday located at 54.55 – This is where the Kijun-sen can be located on the daily charts. If the 55.56 lows seen at the start of this month are broken again, bears will look for a run back towards the 50 handle with the confluence of the 23.6% Fibo target at 50.20. Bulls can look to a target of the recent tops of 57.17 (78.6% Fibo) ahead of the 57.85/93 double-tops. While the price is recovering, bulls need to get and hold above the 50% retracement of the March decline at 56.20).