Front-month WTI crude was hovering just above $67 per barrel in early trade, supported by risk sentiment despite a reported build in weekly inventory data. Concerns about weak Chinese demand and a global surplus continue to weigh on crude, with prices currently rangebound between $65 and $68.
It remains a difficult market to call. Front-month WTI has bounced off $65 per barrel on a couple of occasions this month. This is a level which also held as support on a closing basis back in September.
Source: TradingView
But this level doesn’t look particularly robust. In other words, it’s not the kind of support area buyers should rely on too heavily when it comes to placing their stops.
The daily MACD has turned up but remains in negative territory without being particularly oversold. In other words, it isn’t providing any help in forecasting where prices go next. It’s possible that oil can head higher from current levels. But it’s just as likely that prices break lower.
Overall then perhaps the most likely outcome is that oil will continue to be rangebound until there’s a catalyst to push it decisively in one direction, or another.
