Light Crude oil prices drifted lower again this morning, and front-month WTI briefly broke below $57.00 per barrel. This represented a decline of 5% from the highs hit this time last week and took oil to its lowest level in close to two months. Oil continues to come under selling pressure, and recent rally attempts have been snuffed out quickly.
Since late October, the daily MACD has picked up and closed in on neutral levels. But it has tracked sideways for the last six weeks and now appears to be dipping downwards. This suggests that downside momentum is picking up. For front-month WTI, the most immediate area of resistance comes in at $60.
Source: TN Trader
The first significant line of support comes in at $56 per barrel - the October low. But if WTI were to break below here, then the probability of a retest of this year’s April low, just under $5,5, increases. Oversupply fears continue to dominate the longer-term narrative while global demand growth continues to slow. There doesn’t appear to be much progress on the Ukraine/Russian peace talks. But perhaps it is worth pointing out that lower oil prices have the potential to wreck Russia’s economy, although this could take time.
