Crude oil prices reported losses during Friday's session and continue to do so this morning amid possible oversupply fears. The number of US oil rigs rose by 10 to 892 in the week ended January 15, the first weekly rise of 2019 according to Baker Hughes. The uptick in oil rigs could be considered a sign that oil supplies from the world's biggest economy are set to rise further. Note that US oil production rose to a record high of 11.9 million barrels per day in the week ending January 11, according to the Energy Information Administration. On the other hand, the demand side could weaken substantially and that due to US-China trade war, the deficiency in demand in Europe and the slowdown in the global economy.
After failing to break above the $53.90 level, Crude prices retreated from recent tops to retest the purple trend line presented on the chart. The price is currently hovering just below the $53 level and seems to be breaking the trend line with a bearish momentum as the RSI shows us. If we get a closing candle below the trend line, the we will most probably expect a downward move and we will be focusing on the $51.84 support level.
Support: 52.28/ 51.83
Resistance: 53.26/ 53.89