WTI crude oil remains bearish around $77.50 during early Thursday, after falling the most since late September the previous day.

Earlier, the black gold witnessed a juggernaut recovery after printing a fresh 11-month low at $75.28. The firmer responsive buying action was propelled by escalating supply worries. Chatters over intervention by the OPEC+ in the oil market to support oil prices from its imbalanced movements got confirmed after Saudi Energy Minister said that the current OPEC+ deal will continue till the end of 2023.

The black gold’s weakness could be linked to the downside break of an ascending trend line from December 2021, around $78.80 by the press time.

Also keeping the WTI sellers hopeful are the downbeat MACD signals and the confirmations of the “double top” bearish chart formation, by a clear concurrence of the $81.30 horizontal support.

Considering the aforementioned catalysts, the downward trajectory monthly low surrounding $75.30 is on the cards but the nearly oversold RSI (14) may challenge the oil bears afterward.

In a case where WTI bears fail to retreat from $75.30, the early December 2021 peak near $73.20 may act as an intermediate halt during the likely slump toward the previous yearly trough near $62.35.

Meanwhile, the multi-month-old previous support line near $78.80 will precede the $80.00 threshold to restrict the short-term upside of the energy benchmark.

Following that, the 11-week-old horizontal area, also forming part of the “Double top” bearish formation near $81.30, could challenge the commodity buyers before directing them to the 61.8% Fibonacci retracement level of December 2021 to March 2022 upside, close to $86.90.

WTI Expected of a Short Term Recovery Before Further Downfall

Nov 25 2022