The WTI crude oil prices dropped despite the report that OPEC minister agreed to cut the oil output by 1.5 million barrels per day. It’s worth to mention that the cut is finalized after approval from Russia. A meeting of both OPEC and OPEC+ members later in the day is in focus.
Russia’s willingness for deeper production cuts is still doubtful because recent reports suggested that Moscow was supporting an increase to the current level of cuts rather than a further reduction. The news failed to boost oil prices today because falling U.S. equities places a further burden on oil markets.
Despite some improvement in prices this week, the WTI is still below 24% on the year, and the coronavirus is playing a major role. The coronavirus cases continue to rise in the world’s largest economy. Some time ago, the U.S. Vice President Mike Pence accepted that they have a shortage of virus testing kits for now. Moreover, New York officials also recently crossed wires while saying that the coronavirus infects nearly 2,733 people in the city, which is also putting bearish pressure on the crude oil prices.
Daily Support and Resistance
- S1 42.01
- S2 41.76
- S3 41.42
Pivot Point 43.51
- R1 43.72
- R2 44.26
- R3 45.01
On the technical front, the crude oil price has broken below the double bottom support level of 43.95, which opens up further room for selling until 40.95. Recently, the MACD of crude oil has also forming bigger histograms on the 4-hour chart, which are supporting the selling trend in the WTI prices. Closing of candles below 43.96 may confirm the chances of more bearish bias in the WTI prices today. Let’s consider staying bearish below 43 to target 42.25 and 41.75. Good luck!