Current trend

During the Asian session, WTI Crude Oil price is developing downward dynamics in the short term, trading at 76.80 and renewing the lows of July 24.

The quotes remain under pressure despite the Russian authorities’ decision to extend a voluntary supply cut of 300.0K barrels per day until the end of the year, in addition to a production reduction of 500.0K barrels. In turn, Saudi Arabia intends to maintain the current restrictions of 1.0M barrels per day, and in December, experts will conduct monitoring to determine the authorities’ next steps. According to analysts, it will further reduce supply volumes in the market, which OPEC is trying to balance against the background declining demand. Thus, the poor economy of the EU leads to a reduction in industrial consumption, and the pace of economic recovery in China is insufficient, although October oil imports increased by 7.0% after a decline of 13.0% earlier.

Additional pressure on the quotes was exerted by data from the American Petroleum Institute (API) on the dynamics of commercial reserves: for the week of November 2, the indicator adjusted by 11.9M barrels after 1.347M barrels for the previous period. The final report from the US Department of Energy’s Energy Information Administration (EIA) will be published today: previous data reflected an increase of 0.774M barrels.

Support and resistance

On the daily chart, Bollinger bands are steadily declining: the price range slightly expands from below but not as fast as the “bearish” sentiment develops. The MACD indicator falls, keeping a strong sell signal (the histogram is below the signal line). Stochastic approached its lows and tried to reverse horizontally, indicating that the instrument may become oversold in the ultra-short term.

Resistance levels: 78.00, 79.14, 80.00, 81.00.

Support levels: 77.00, 76.00, 75.00, 74.00.

Trading tips

Short positions may be opened after a breakdown of 77.00 with the target at 75.00. Stop loss is 78.00. Implementation time: 1–2 days.

Long positions may be opened after a rebound from 77.00 and a breakout of 78.00 with the target at 80.00. Stop loss – 77.00.