Crude oil prices continue lower, for second day giving up 0.82% at $55.35 per barrel, stepped back by concerns of weak global demand and as investors keep a wait and see stance after President Trump reported that he expects to sign a part of the trade deal with China ahead of schedule. IMF lowered its growth forecasts for the Asian region to 5% from 5.4% projection made in April. The global economic growth rate expected to 3% down from 3.2% in a July forecast.
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.
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 Technical Levels
Crude oil today reached the 100-day moving average while as of writing the price has also slipped below the 50-day moving average. A close below that support line might have negative implications and might attract more offers that will cancel the recent positive momentum which started last week.
On the downside, first support stands at daily low at $55.17, followed by October 23 lows at $53.71. Now on the upside, crude oil immediate resistance level stands at the daily high at $55.88, while more offers could emerge at $56.85 the high from yesterday before an attempt to 200-day moving average at $57.13. Next barrier is at $58.50 mark the high from September 24th.