Crude oil prices started the week lower, giving up 0.62% at $56.31 per barrel snapppping four consecutive days of gains, stepped back by concerns of weak global growth. Last week the EIA weekly report noted a 1.699 mb drop in USA crude oil stocks missing forecasts of an increase of 2.8 mn bbl. The drop in inventories came from steady oil production, rise in refinery usage, higher crude exports and lower imports. US crude oil production was steady at record level of 12.6 mb per day. Adding further support to crude were news reports indicating that OPEC+ producers might consider production cuts in their next meeting in December.
Crude oil investors focus on crude oil fundamentals and ignore the new point of geopolitical tensions in the Mideast. Many economists expect WTI crude oil to remain under selling pressure in the short term due to weak global demand on the back of global growth fears, US-China trade tensions and a stronger US dollar.
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WTI Crude Oil Resistance and Support
Crude oil managed to break above the 100-day moving average last week attracting more bids and breaking the three-week trading range between $52 and $55 as the momentum turned bullish for crude oil prices, breaching above the 50 and 100-day moving averages. Now on the upside, crude oil immediate resistance level stands at the daily high at $56.85, while more offers could emerge at $57.118 the 200-day moving average. Next barrier is at $58.50 mark the high from September 24th.
On the flip side, immediate support stands at daily low at $56.24, then at $55.74 the 100-day moving average followed by October 23 lows at $53.71. Long positions can sit comfortably as long as the crude price trades above the 100-day moving average.