11 Feb 2016
Oil bounces from fresh lows amid OPEC headlines
After settling at its lowest level in almost 13 years, crude oil prices turned higher and jumped amid headlines suggesting the OPEC is willing to cooperate on an output cut.
West Texas Intermediate crude futures settled at $26.21 a barrel on the New York Mercantile Exchange down 4.5% on the day and at its lowest since May 2013.
However, WTI bounced to near $27.00 a barrel following a story from WSJ citing the UAE energy minister saying the “OPEC is prepared to cooperate on a cut, but current prices are already forcing non-OPEC producers to at least cap output”.
Early Thursday, news made the rounds of a Venezuelan proposal to freeze oil output at current levels, in an attempt to halt prices' declines. Saudi Arabia welcomed the proposal, but wants Iran to join the agreement also, something this latest is not willing to do.
WTI technical view
“WTI crude futures closed in the red for sixth day in-a-row, and with the daily chart showing a lower low and a lower high, as the technical indicators continue to head lower near oversold levels, supporting some further declines towards the 25.00 level”, said Valeria Bednarik, chief analyst at FXStreet. “In the shorter term, and according to the 4 hours chart, the outlook is also bearish, as the RSI indicator is turning back lower within oversold levels after a limited upward correction, while 20 SMA extended its decline further, now acting as a strong dynamic resistance around 28.20”.
Support levels: 26.00 25.50 24.90. Resistance levels: 27.40 28.20 29.00.
West Texas Intermediate crude futures settled at $26.21 a barrel on the New York Mercantile Exchange down 4.5% on the day and at its lowest since May 2013.
However, WTI bounced to near $27.00 a barrel following a story from WSJ citing the UAE energy minister saying the “OPEC is prepared to cooperate on a cut, but current prices are already forcing non-OPEC producers to at least cap output”.
Early Thursday, news made the rounds of a Venezuelan proposal to freeze oil output at current levels, in an attempt to halt prices' declines. Saudi Arabia welcomed the proposal, but wants Iran to join the agreement also, something this latest is not willing to do.
WTI technical view
“WTI crude futures closed in the red for sixth day in-a-row, and with the daily chart showing a lower low and a lower high, as the technical indicators continue to head lower near oversold levels, supporting some further declines towards the 25.00 level”, said Valeria Bednarik, chief analyst at FXStreet. “In the shorter term, and according to the 4 hours chart, the outlook is also bearish, as the RSI indicator is turning back lower within oversold levels after a limited upward correction, while 20 SMA extended its decline further, now acting as a strong dynamic resistance around 28.20”.
Support levels: 26.00 25.50 24.90. Resistance levels: 27.40 28.20 29.00.