Fundamentals playing out, weighing heavily on sentiment for lower oil prices. OPEC and allies disappointed the energy markets by failing to commit to bigger production cuts to combat the presumed increase in supply considering easing tensions between the US and Iran. The next OPEC meeting will be in Vienna on Dec. 4 and Oman’s oil minister, Mohammed bin Hamad al-Rumhy, said OPEC+ would discuss the possibility of deepening the existing output cut deal then. Furthermore, justifying the bearish case for now, OPEC on Wednesday lowered its forecast for global oil-demand growth in 2019 and 2020 and, in addition, the Energy Information Administration reported that US crude supplies fell by 6.9 million barrels for the week ended September 6th for the fourth weekly decline in a row.
Crude oil prices continued to face a sharp decline for the second session in a row breaking below the $55 level after the bearish pressure dominated. The price is currently trading just below the $55.06 resistance level as the momentum approaches the oversold zone. We will be focusing on the downside as the break above the trend line presented on the chart turned out to be a false one for the moment. The $53.89 support level will be on our watch.
Support: 54.42/ 53.89
Resistance: 55.06/ 55.92