WTI Crude Oil Holds Firm Around 2-Month Lows After Thursday’s Plunge

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The price of WTI Crude oil is holding firm around the $58 level following Thursday’s plunge. The price of light crude fell to 2-month lows of about $57.90 yesterday after spending more than 7 weeks above $60.00.

This decline sent shockwaves across the oil trading community and the energy markets with reports suggesting that there could be more about the fall than just an unexpected plunge.

WTI Crude Oil Fundamentals Overview

From a fundamental perspective, reports indicate that the price of crude oil fell due to fears of declining profits margins which prompted Asian refiners to take drastic measures.

Citing unnamed sources, Reuters reported that Asian refiners were considering a reduction in their run-rates because of persistent pressure on profit margins. The reported claimed that higher international oil prices were behind the declining profit margins of oil refinery companies in the region, which have hit the lowest levels since 2003.

SKE Energy from South Korea, the Singapore Refinery Company alongside a refiner in Thailand were named among those considering a reduction of their run rates.

WTI Crude Oil Technical Analysis (the 240-min Chart)

WTI Crude Oil Holds Firm Around 2-Month Lows After Thursday’s Plunge

Technically, the price of WTI Crude Oil appears to have exited the previous trading range where it spent time most in the last seven weeks. It is now eyeing some stability around $57.50 to $60.00 trading range, where it spent some time between mid-March and the Start of April this year.

As such, the bulls will target profits by targeting $60.00 level while the bears will pounce by targeting profits at around $57.45.

WTI Crude Oil Technical Analysis (the Daily Chart)

WTI Crude Oil Holds Firm Around 2-Month Lows After Thursday’s Plunge

In the daily chart, the price of WTI Crude Oil appears to be pegged just between the 100-Day and the 200-Day moving average lines. The two levels provide perfect targets for profits.

The bulls will look to target short-term profits at around $60.28 while the bears will look at $57.43 for the same time frame. On a long-term basis, $63.94 will provide a good target for the bulls while $55.21 will do the same for the bears.

In summary, the price of WTI Crude Oil has plunged this week to levels last witnessed two months ago. The news that some refiners in Asia are looking to cut their run-rates in a bid to boost profit margins has hit the market badly and now more refiners might follow the same. The price of oil now appears to have a bearish bias based on fundamentals.

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