Last Monday, with the opening trades of this week, Crude Oil – WTI – was able to attract the attention of investors and traders in the global financial and stock markets, as – WTI – opened its trades with a sharp drop at $30 level per barrel from its close level 41.51 last week.
WTI fell last Monday with %27 in a down price gap, in the biggest daily loss incurred since 11 years ago. The failure of OPEC + group consultations between the Kingdom of Saudi Arabia and Russia to keep oil prices at an appropriate level by reducing production was the main reason behind this decline.
Experts and analysts have evaluated some conflicting statements and comments between Saudi Arabia and Russia and named it “Oil Price War”, as Russia has stated that its public budget can adapt with oil prices from 25 to 30 dollars per barrel for six to ten years. At the same time, some sources stated that Saudi Arabia attends to raise its oil production to more than 10 million barrels per day to send oil prices to lower levels.
Technical Analysis – WTI – Crude Oil
- WTI is testing a horizontal pivot resistance at 36.30 level.
- WTI is trading within a bullish channel range.
- WTI rebounds from the current support level of 27.75.
- If WTI breach of 36.30 level and was able to stability above it, this will push the price towards 39 and 40 levels.
- If WTI failed to breach 36.30 level, this will push the price to test the channel’s support line.
- If WTI breaks the bullish channel support line, the price will likely head towards the current support 27.75.
Technically: if WTI was able to go through the horizontal pivotal resistance 36.30 level, this will push the price towards 39 and 40 levels. In case this scenario fails, we may see WTI returns to test the bullish channel support line, and if it breaks this line, it may heads towards the current support level 27.75.
Fundamentally: The failure of OPEC+ meeting is from the main factors that supported oil prices drop, besides the negative impact of Coronavirus outbreak on the global oil market.