Abstract:The oil market experiences selling pressure as prices reach around $72.00 due to market expectations of no early OPEC production cuts. US debt ceiling negotiations remain at a standstill, while oil prices hover near a significant level since the uptrend line started from the low point of $67.47 on May 4th.
In early Asian trading, New York Mercantile Exchange's West Texas Intermediate (WTI) crude oil futures attempted to rebound towards the $72.00 level but faced strong resistance. Oil prices are expected to further recover downwards as OPEC is not anticipated to further cut crude production at the next meeting on June 4th.
Russian Deputy Prime Minister Alexander Novak stated that OPEC+ is not expected to take new measures at the June 4th meeting. In contrast, Saudi Arabia's Energy Minister, Abdulaziz bin Salman, hinted at the possibility of a new round of production cuts during the meeting.
The US Dollar Index (DXY) has consolidated around 104.21 as ongoing negotiations between the White House and Republican leaders indicate a continued deadlock before the US debt approaches default.
The 4-hour chart shows that oil prices failed to break above the 50% Fibonacci retracement level of the downward trend from the high of $83.40 on April 12th to the low of $64.31 on May 3rd, which was at $73.94. Selling pressure quickly emerged, pushing oil prices down. Additionally, the 200-period moving average at $73.72 acted as resistance.
Oil prices are at a crucial level near the uptrend line since the low of $67.47 on May 4th.
A decline in the Relative Strength Index (14) to the bearish range of 20.00-40.00 will trigger a downward momentum.
Looking ahead, if WTI crude oil prices fall below the low of $71.03 on May 25th, it will exert significant downward pressure, with WTI prices potentially dropping to the key support level of $70.00, followed by the 23.6% Fibonacci retracement level at $68.88.
On the other hand, if WTI oil prices stabilize and rebound above the 50% Fibonacci retracement level of $73.94, it will boost prices towards the 61.8% Fibonacci retracement level at $76.16. Breaking above this level, oil prices will test the high of $77.86 on April 26th.
4-hour chart of WTI oil prices
WTI Oil Price
Overview
Latest Price Today: 71.93
Today's Change: +0.10
Today's Change %: +0.14
Opening Price Today: 71.83
Trends
20-day Moving Average: 72.13
50-day Moving Average: 74.51
100-day Moving Average: 76
200-day Moving Average: 79.71
Levels
Previous Day High: 74.36
Previous Day Low: 71.03
Last Week High: 73.55
Last Week Low: 69.39
Last Month High: 83.4
Last Month Low: 73.88
Daily Chart 38.2% Fibonacci Retracement Level: 72.3
Daily Chart 61.8% Fibonacci Retracement Level: 73.09
Daily Chart Pivot Support 1: 70.45
Daily Chart Pivot Support 2: 69.08
Daily Chart Pivot Support 3: 67.12
Daily Chart Pivot Resistance 1: 73.79
Daily Chart Pivot Resistance 2: 75.74
Daily Chart Pivot Resistance 3: 77.12
*The provided information is for reference purposes only and should not be considered as financial advice or investment recommendation.
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