Oil Reverses from 7-Month Highs, Dips Below $49.00 Mark
After touching a fresh seven-month high level of $49.25, WTI crude oil futures turned lower on the back of some profit taking from bullish traders and as the greenback remains well supported.
In the past one hour or so, oil futures extended their slide and dropped to a session low level of $48.37, just to recover back to currently trade, absolutely flat from Thursday’s close, near $48.65. The black gold is now headed for a sixth week of advances in the past seven, recording a staggering recovery in excess of 75% from 2016 lows of $27.55.
Concerns over supply disruption had been the key factor for this week's up-move witnessed in the commodity. The ongoing geopolitical tensions in Nigeria and Libya coupled with the Canadian wildfires and crisis in Venezuela continues to fuel over supply disruptions worries, shrugging off the concerns of a supply glut that had led to a sharp slide in the commodity since mid-2014.
Technical levels to watch
On a sustained move back above day’s peak resistance near $49.25, the commodity seems all set to test the very important psychological mark resistance near $50.00/barrel. However, with daily RSI heading into near-term overbought conditions suggests that bulls might take a breather at higher levels before resuming the strong near-term up-trend.
On the downside, weakness below $48.00 round figure mark support might be short-live and is likely to take support near $47.70 level. Any dip below this immediate support is likely to get bought into, thus restricting further fall near a previous strong resistance, now turned strong support, near $47.00 handle.