Crude oil price trades higher today supported by the OPEC+ comments that they might deepen the output cuts to support crude oil prices in the upcoming meeting in March. Crude prices got further support after API showed a surprise draw of 4.27 million barrels per day compared to the expectations of 4,28 million barrels per day. Crude oil price was under selling pressure amid growing concerns that travel restrictions in China may affect global fuel demand.
Investors worried about a severe impact on the Chinese economy and crude oil demand. This may not change unless there are clear signs that the coronavirus spread has been contained.
Traders will keep an eye on the Federal Reserve’s first meeting of 2020 and the monetary policy decision. Analysts expect the FED keep rates unchanged.
The crude oil price is 0.79% higher at $53.90 as the price attempts a rebound from three-month lows. Crude oil was under severe selling pressure annnd reached oversold levels amid the coronavirus spread in China. The RSI (14) index breached the 30 mark that indicates that oil price is oversold. So today’s correction might be just a reaction to oversold price levels with limited strength.
On the downside, initial support for crude oil price stands at $53.65 today’s low. Further down the next support area will be met at $52.72 the low from yesterday’s trading session. A credible break below would result in a deeper move down to $52.09 the low from January 27th.
On the flip side, crude oil prices immediate resistance stands at $54.25 the daily top. If the crude oil price breach the initial resistance, the next barrier will be met at $55.94 the high from January 24th. In case of a breakout the 100-day moving average at $57.19 is the next resistance level.