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Crude Oil Price Hits Weekly Lows; Saudi Production Back Online

WTI Crude oil price hit fresh weekly lows on a Reuters news report which stated that Saudi Arabia’s oil production capacity has been restored. Crude oil price is now at 56.64, keeping bearish momentum going for the day as the release of the latest US crude oil inventories data from the EIA looms.

Comments from the Iranian government have also helped to cool off WTI crude oil prices. According to the Iranian government spokesman, Iran is prepared to provide reassurances if the US returns to the nuclear deal signed a few years ago.

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Crude Oil Price Technical Playbook

The latest US weekly crude oil inventories data is due for release at 2.30pm GMT. WTI crude oil has pushed down to the 38.2% Fibonacci level, where it has found support. Extra support is also provided by the ascending trendline which connects the lows of Sept 3 till date.

A downside break of the current price support will target 54.30 (23.6% Fibonacci retracement level), which is also the low of Aug 16 and September 2. This is also the neckline of the double bottom formed in June 2019 on the daily chart, which should act in role reversal.

On the flip side, failure to breach the current price support would open the door for WTI crude oil to retest 58.50 (July 31 high and 50% retracement line). Above this level, 60.33 (July 10 high) comes into focus.Download our latest quarterly market outlook for our longer-term trade ideas.

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