West Texas Intermediate (WTI), futures on NYMEX, have slipped below the critical support of $90.00 as the impact of the production cuts announced by OPEC last week has started fading away. The oil cartel announced a supply cut of two million barrels per day (bpd), the highest cut since the emergence of the Covid-19 pandemic.

the energy benchmark’s latest downside aims for the 61.8% Fibonacci retracement of the late August-September downside, around 89.15.

Following that, the 50% Fibonacci retracement level and the 200-SMA, respectively near 86.65 and 85.75, could try to challenge the bears before giving them control.

It’s worth noting that the bearish MACD signals and the RSI’s retreat from the overbought territory keep the WTI bears hopeful.

On the flip side, recovery moves need to cross the support-turned-resistance line from September 30, around 90.70, to convince intraday buyers.

Even so, the monthly high near 92.65 and the 93.00 threshold may probe the WTI buyers before directing them towards the August month high near 97.30.

Overall, WTI crude oil is likely to witness a short-term pullback but the bearish move is far from here.

WTI process might find suppot at the 50-hour SMA, now at $90.50, which has contained previous reversals over the last week, and would keep the near-8.2% term bullish trend intact.

Below $90.50, next potential targets would be $90.00 psychological level and mid-September highs around 86.50.

For another hawkish outlook, above $93.00 (intra-day high) WTI prices might be aiming for $94.45 (38.2% retracement of the June – October decline) and then $97.25 (August 29 high).

61.8% Fibo Level Under a Strict Surveillance For Hawkish Entries

Oct 11 2022