West Texas Intermediate crude prices have extended their downside all the way into the $51 handle as US stocks extend their losses in the worst start of a fourth-quarter since the Global Financial Crisis during yesterday’s session. Further, the latest comments by the Saudi Arabian Energy Minister Prince Abdulaziz triggered the fresh leg lower in the black gold. He said that the Kingdom’s oil production capacity has been fully restored after attacks on its facilities last month. Meanwhile, oil demand growth outlook amid global economic slowdown combined with swelling US inventories also collaborate to the bearish tone around the prices. The US crude inventories rose 3.1 million barrels last week, much more than the expectations for an increase of 1.6 million barrels, Wednesday’s data published by the US Energy Information Administration showed.
Crude oil prices printed new lows during yesterday’s session at $51 per barrel before quickly retreating back up above the $51.83 support level. The price is currently trading above the $52.50 support level as the divergence between the price and the momentum points towards an upsurge. We will be focusing on a recovery to the upside with the $53.89 resistance level on our watch.
Support: 52.5/ 51.83
Resistance: 53.26/ 53.89