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.
