Oil plunges to a 17-month low all the way back to the $42 handle, weighed down by concerns about excess supply in the market and on worries about a possible drop in energy demand. Additionally, traders fear the semi-dovish FOMC statement that pinned out at a more slowing global economy between the downside revision of the GDP as well as continued rate hikes. The black gold is having a hard time digesting all the fundamental events, and prices are at risk for more downward moves ahead.
As expected, Crude prices went to retest recent lows after a failed recovery but the support from the $45.70 handle is still strong. The price is currently hovering below the $46.5 level and there is a divergence between the momentum and the price that points towards a potential upward move. The level we will be watching is the $48.28 level unless the bulls loose traction on this move.
Support: 50.86 / 50.17
Resistance: 51.98 / 52.53