This week the price fell to $43.20 per barrel, last time below which it was in August.
The price remains under pressure amid excess in oil supply as OPEC countries continue increasing their output. In addition, expectations of Iranian oil, falling economy growth in China – one of the main oil consumers in the world, and strengthening US Dollar also pressure the price. However, yesterday’s data on the US oil production showed almost no change to the previous period while experts forecasted an increase of 2-3 million barrels a day, which supported oil prices.
Support and resistance
The price is moving along a descending channel. During the last few days it tested a strong support level at 43.20 but could not overcome it.
Until the end of the year the price will remain in a range 42.00-55.00, while a fall below 42.20 is unlikely. In the medium term, the downward trend will continue.
Technical indicators give contradicting signals. Ichimoku and Bollinger Bands signal a fall continuation. MACD’s histogram is in the negative zone but its volumes start falling.
Support levels: 43.65, 42.85, 43.20, 40.00, 37.00.
Resistance levels: 45.00, 46.50, 48.40, 48.85, 50.00, 50.55, 51.30, 53.05, 53.90, 54.70, 56.00.
Long positions can be opened below the level of 43.00, and short positions can be opened above the level of 53.00. Stop-loss should be 4 times shorter than the target.