Oil prices fall as bears remain in control

Summary:

Oil.WTI breaks below 2018 low of 54.58
Market down by 4% on the day
Daily close on Brent Oil could be key

Nearly everywhere you look today there’s heavy declines, with the Oil complex proving no exception. Brent Oil (-4.2%) and Oil.WTI (-4.4%) have both come under sizable selling pressure with the former falling to its lowest level in 8 months whilst the latter has made a new low for the year. These declines have seen recent swing lows taken out to the downside and should the market end the day below them then the break lower would be further confirmed. First off let’s look at Brent Oil.

Today’s break lower could be seen as a possible continuation of the downtrend which began at the start of last month with price falling into bear market territory after the prolonged slump. Given the size of the fall which is currently over $20 and counting it is not too surprising that there has been little by the way of pullbacks. The last 4 sessions have seen a pause in the downtrend but a daily close below 64.66 would open up further declines towards 61.85.

Oil has had another large drop today with the market falling to an 8-month low. A daily close below 64.66 would confirm this break and open up a further move lower to 61.85 and possibly even below. Source: xStation

Oil.WTI has been hit even harder than Brent Oil during this sell-off and while the 64.66 was a fairly short term support for the latter, the former bottomed out recently at a nice level around 55.81. This level coincides with the prior resistance at the turn of 2016/17 and also where price made a decisive break higher from last November. It is also the 41.4% fib of the rally from the lows of 26.14. A weekly close below 55.81 could be seen to confirm a significant breakout with the 50% the next level to look to at 51.46 and the 61.8% at 45.48. The market is on course for a 7th consecutive weekly decline and with nearly all trend identification techniques pointing lower the bears seem to be firmly in control of the tape.

Oil.WTI has fallen further than Brent and reached its lowest level of the year today. Price could be breaking below key support with the next fib level below the 50% at 51.46. Source: xStation

This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.

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