Oil is recovering after last night’s drop to a new low
- On Tuesday, the oil price was forced to drop to a new annual low of $65.23
Oil chart analysis
On Tuesday, the oil price was forced to drop to a new annual low of $65.23. A further pullback below that level was stopped, and a recovery to $66.25 was initiated. During this morning’s Asian trading session, we saw successful maintenance and continuation on the bullish side. Oil is currently at $66.90 at its daily high. We need to see a continuation above $67.00 to get closer to the EMA 50 moving average.
In previous attempts, this moving average was an obstacle for the oil price to move to the bullish side. For a bullish option, we need an impulse to the $68.00 level. That should be enough room for the price to try to hold above the EMA 50 moving average. After that, the chances of starting a bullish consolidation increase. Potential higher targets are $69.00 and $70.00 levels. The EMA 200 moving average is the next major resistance to further recovery.
The price remains on the bearish side in the middle of the week
If we stay below the EMA 50 moving average, we expect the initiation of a new bearish consolidation and a fall below the daily open price. The price of oil is gradually moving to the bearish side, and we will see new pressure on the previous low. This time, the price will form a new weekly low and confirm the beginning of a bearish option. Potential lower targets are the $65.00 and $64.00 levels.
OPEC’s monthly market report forecasts that global oil demand will remain stable. OPEC+ has decided to extend production cuts for two months, Bloomberg reports. The American Petroleum Institute published new data last night. Oil stocks fell by 2.79 million barrels, giving the price current momentum and a slight recovery.
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