Crude oil was on the back foot on Wednesday, despite US government data showing a fourth straight weekly fall in domestic crude supplies. The sharp decline came following a report that President Donald Trump discussed easing sanctions on Iran raised the potential return of Iranian oil to the market. Trump is seeking to secure a meeting with Iranian President Hassan Rouhani later this month, after ousting two days ago adviser John Bolton, a hawk on Iran and Venezuela, who advocated for pushing Iranian oil exports to zero. Additionally, weighing on oil prices, OPEC cut its forecast for growth in world oil demand in 2020 due to an economic slowdown, an outlook the producer group said highlighted the need for ongoing efforts to prevent a new glut of crude.
Crude oil prices faced a sharp decline of 3.8% during yesterday’s session printing a low of %55.62 per barrel after loosing momentum. The price is currently hovering around the $56.27 resistance level after it found support by the previously breached trend line presented on the chart. We will focus on the upside on the longer term and the $56.79 resistance level will be on our watch for the day.
Support: 55.92/ 55.06
Resistance: 56.27/ 56.79