The price of the light crude oil on Thursday plunged to a new 3-month low of about $52.03 as fear of the potential impact of coronavirus grew. The WTI Crude Oil has been trading on a sharply descending wave since early this year after peaking to top $65.80 early on.
The oil price continues to enjoy strong support around the $51.00-$52.00 range which helped to trigger a late rebound on Thursday. This pushed oil prices off oversold levels of the RSI indicator to trade in the normal trading range.
Light Crude Oil Price Fundamentals Overview
From a fundamental perspective, the WTI Crude oil is trading at the back of one of the most threatening epidemics in recent times. The coronavirus outbreak in Asia has affected the market, which in turn affects oil prices. China is one of the world’s leading importers of oil. And over the last few weeks, the country has been struggling to contain the spread of the deadly virus. This could continue to affect oil prices in the coming weeks.
On Tuesday, the US API weekly crude oil stocks balance came in at -4.27M barrels down from the previous week’s 1.6M. However, the EIA crude oil stocks change contradicted this outcome missing the expectation of 0.482M with a whopping 3.548M barrels. This was a massive increment from the previous week’s change of -0.405M.
On the other hand, the EIA natural gas stock report showed a storage change -201B down from -92B. This was also slightly better than the expected storage change of -195B.
Light Crude Oil Technical Analysis (the 60-min Chart)
Technically, the price of oil appears to be trading under intense bearish pressure. The WTI crude oil has now dropped several pips below the 100-hour SMA while the 200-hour SMA is a few pips higher. However, Thursday’s late rebound pushed the light crude oil price off oversold levels to create some room for bears to target.
Therefore, the bears will be targeting short-term profits at around $52.03 or lower at $50.90 going into Friday. On the other hand, the bulls will hope that the rebound can continue towards $53.63 or higher at $54.47.
Light Crude Oil Technical Analysis (the Daily Chart)
In the daily chart, the WTI crude oil appears to have found strong support around the $50.00 level. This comes after the latest pullback within a highly volatile sideway’s channel. The price oil still remains a few paces below the 31.8% Fib level on its recovery trend.
Therefore, the bulls will be targeting rebound profits at around $56.83, $60.34 or higher at $66.07. On the other hand, the bears will look to pounce for long-term profits below the supports zone at $49.85, $45.89, or lower at $42.39.