Summary:
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Oil.WTI breaks below 2018 low of 54.58
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Market down by 4% on the day
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Daily close on Brent Oil could be key
Nearly everywhere you look to do 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
