Oil reported some losses during yesterday's session, declining towards the $58.9 support level. The domestic Crude inventory rose by 2.8 million barrels per day during the week ended March 22, bringing the figure to 442.3 million barrels, which reportedly amounts to a three-percent increase year-on-year. Apart from the US inventory report, the heightened US recession fears and the resulting risk aversion may be contributing to the downward momentum in Crude. Looking forward, the oil benchmarks may extend losses if the flight to safety gathers pace in the European session.
As expected, Crude prices declined during yesterday's session to find support from the $58.9 level as it looks it is going to be challenged again this morning. The price is struggling currently with the $59 handle as the momentum continues to be bearish with a lot more room to go down. The strong divergence that has occurred in the last week are yet to show their fully effect, and that is why we are going to focus on more downward moves especially towards the $58.02 support level.
Support: 58.9 / 58.02
Resistance: 59.4 / 59.99