US oil prices were lower by -1.05% on a spot basis having traveled between the $56.49 and $57.55 levels while the market consolidates with WTI now sat at a crossroads. There is a strong supply-side narrative but global demand concerns are undermining the upside. With OPEC+ keeping the taps shut, rising Middle East geopolitical risks and sharp reductions in Iranian export flows, along with lower US inventories, will all contribute to the upside potential for Crude. Meanwhile, the OPEC cuts may not be enough to prop up prices if trade progress between the US and China deteriorates again.
As expected, Crude prices edged higher towards the $57.4 resistance level during Wednesday’s session but quickly retreated during yesterday’s session and continued on the same level this morning amid the lack of volume and the continuation of the correction. The price is currently trading around the $56.69 support resistance level as the momentum re-turned to be bearish. We will be focusing on the downside especially the $55.73 support level.
Support: 55.73 / 55.06
Resistance: 56.69/ 57.4