Crude Oil Price Update – Weakens Under $52.62, Strengthens Over $53.40Based on the early price action and the current price at $52.63, the direction of the March WTI crude oil futures contract the rest of the session on Monday is likely to be determined by trader reaction to an uptrending Gann angle at $52.62.
U.S. West Texas Intermediate crude oil futures are down sharply on Monday shortly before the regular session opening. Concerns over a drop in demand from Asia are driving prices lower. The catalyst behind the selling pressure is the rapidly spreading China corona virus.
Some feel that the selling has been a bit excessive and being fueled by aggressive speculators.
The markets are being “primarily driven by psychological factors and extremely negative expectations adopted by some market participants despite (the virus’) very limited impact on global oil demand,” Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman Al-Saud said on Monday.
At 11:59 GMT, March WTI crude oil is trading $52.63, down $1.56 or -2.88%.
Daily Technical Analysis
The main trend is down according to the daily swing chart. The downtrend was reaffirmed earlier today when sellers took out the October 16 main bottom at $52.40. The next potential downside target is the October 3 main bottom at $50.18.
The main range is $50.18 to $65.40. Its retracement zone at $55.99 to $57.79 is new resistance. Trading below this zone is helping to generate the strong downside bias.
Daily Technical Forecast
Based on the early price action and the current price at $52.63, the direction of the March WTI crude oil futures contract the rest of the session on Monday is likely to be determined by trader reaction to an uptrending Gann angle at $52.62.
A sustained move under $52.62 will indicate the selling is getting stronger. This is the last potential support angle before the $50.18 main bottom.
Holding $52.62 will indicate the presence of buyers. Taking out the downtrending Gann angle at $53.40 will indicate the counter-trend buying is getting a little stronger. If this is able to generate enough upside momentum then look for a potential rally into the next downtrending Gann angle at $55.77.