Oil slides 6% as President Trump said a trade agreement with China remains a “good possibility”

Oil fell below 200MA, heading to 54?

Technical: Crude oil is trading at 58.70, breaks the 62 or 200MA a former support and now turned to resistance. Trend remains weak for downside 55-56 levels initially. Daily 200MA stands at 59.65 which could restrict the da t breach that level, if so can see a sharp recovery till 62. For the day one can add or hold sells till 59-59.50 levels for downside 57.30 (Yesterday low). Daily RSI stands at 34 and MACD at -0.58 giving some hint to rebound technically. Overall sell on rise is advised for the day.

Fundamental: On Thursday, WTI Crude prices witnessed a significantly fall of 5.7 percent to close at $57.9 per barrel over constantly building trade tension between U.S. and China, dampening the prospects of global economic growth. Supply crunch arising from the Middle East was supporting the crude prices till now. However, escalating trade tension between U.S. and China overpowered the supply shortage worries as it raised global demand concerns for Crude. Moreover, Crude inventories surged by 4.7 million barrels last week negating the markets expectation of a decline in the inventory levels. US Crude stocks rose to their highest levels since July 2017 due to falling refinery output, mainly in Middle East because of their on-going issues with United States.

SUGGESTION: BUY OIL TILL 58.50-60 FOR 59.80/60 AND SELL FROM 60.50 FOR 58.90/58.50

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