Out of all commodities, oil experienced the biggest fall yesterday. The price of crude oil WTI fell by 7.7%, which was the biggest single day fall since 4 February, while Brent fell by 6.3% (the biggest single day fall since 27 November).
Today, the price made a little correction. August WTI futures grew by $0.39, while Brent grew by $0.52.
Oil price remains under the pressure because of the following reasons: large reserves in the US; oversupplied markets; falling Chinese imports; Greek crisis; a possibility that the Iranian oil is released on the markets if the agreement on its nuclear program is reached this week.
Moreover, oil output from OPEC countries is increasing despite daily output quota of 30 million barrels set earlier. In June, for example, OPEC pumped out 31.28 million barrels a day, which was 170 thousand barrels more than in May.
Thus, in the medium-term the price of oil remains under the pressure.
Support and resistance
Yesterday, the price broke down the support level at 58.00 and today oil is trading near the bottom border of a descending channel at 57.00. The next aims are 55.00, 53.00 should the trend continues.
OsMA and Stochastic on the 4-hour, daily and weekly charts remain in the sell zone.
Support levels: 56.00, 55.00, 53.00.
Resistance levels: 59.00, 60.80.
Open short positions from the levels of 58.00, 60.00 with targets at 55.00, 53.00 and stop-loss at 59.50.
Long positons can be opened after the breakout of the level of 60.80 with targets at 62.80, 63.90, and 68.60, 72.70 (38.2% Fibonacci) should the trend continues.Publication source