The price of a barrel of oil traded almost 3% lower since hitting a five-month high last week amid recessionary signals and a bearish divergence in US yields. Stocks are troubled by this and the sentiment is favoring a risk-off environment of which oil will always struggle within when major global economies are seen to be moving towards a recession which would likely weigh on energy demand. However, the Organization of the Petroleum Exporting Countries are making an effort to reduce output and the U.S. sanctions on Venezuela and Iran have are likely to underpin the bid.
Oil prices re trying to correct after trading almost 3% lower since hitting new highs last week, which is caused by a divergence between the price and the momentum as we can see on the chart. The price is currently struggling to break above the $59.4 resistance level. If the price fail to support its corrective move, then we will be focusing on the downside and in particularly the $58.02 support level.
Support: 58.9 / 58.02
Resistance: 59.4 / 59.99