Tumbling WTI Concerns for $41.30
WTI crude reported the largest
one-day fall in three months on Wednesday, bottoming at $41.23 from the
high level of $43.20. Oil prices have rebounded back overnight after
breaching below the key support of $41.30, and are consolidating above
$41.30 now.To get more news about WikiFX, you can visit wikifx official website.
The rally of the U.S. dollar index will become one of the important
factors affecting oil prices. Meanwhile, the ADP said on Wednesday that
the U.S. economy added 428,000 jobs in August. As the third largest
increase of all time, it indicates that the U.S. economy is generally
optimistic in the month.
Accounting for three-quarters of the U.S. economy, the service sector
will embrace its data for August today, including the Markit's final
reading of the Services PMI and the ISM non-manufacturing PMI. In
addition, the non-farm payrolls for August will be published tomorrow.
The overall markets, including the crude oil markets, are expected to
suffer wild swings due to the data.
On the other hand, the EIA
reported that the country's production of crude oil has reached a record
low for the week ending August 28. At the same time, oil prices may be
hampered as the market expectations that refineries will soon be shut
down for equipment maintenance may further weaken the demand for oil and
According to the daily chart, oil prices are
consolidating around the level of $41.30 and expected to further test
this key support in the short term, where a breach below may extend
downside to $34.50 in the medium term. However, if oil prices stay
constructive above the level, there is room for upside to challenge the
resistance zone of $44.0-45.0.
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