WTI rebounds to test key resistanceCrude oil prices have rebounded by over 3% so far this week, though risks remain tilted towards the downside following a 9% drop the previous week. WTI crude has now reclaimed the crucial $70.00 level, but still below the broken support $71.50 to $72.50 area, which it was testing at the time of writing.
Middle East tensions have slightly stabilized as Israel has so far refrained from attacking Iran and has said it will not target its nuclear facilities. However, the situation remains volatile due to Israel’s ongoing operations in Lebanon, which has reignited concerns about disrupted oil supply.
Meanwhile, China's additional stimulus measures, including lending rate cuts, aimed to revive growth, has also helped to support oil prices, but not significantly so. The market is also cautious about a possible Trump victory in the US election, as his policy of boosting oil production could lead to oversupply and further price declines.
From a technical standpoint, WTI remains bearish for now. Significant resistance is seen nears $71.50 to $72.50, while the first line of support now comes in near $70.00 and further support level is seen around $68.00. A potential break below $68.00 could trigger a sharp move down to $65.00, which may not be out of the question given concerns over rising global supply and weakening economic conditions.
By Fawad Razaqzada
