This week, WTI Crude Oil prices resumed their decline and reached their lowest levels over the past six months at 85.75.
The American Petroleum Institute (API) weekly report on energy inventories was released yesterday, which was generally positive for the market: the figure fell by 0.448M barrels, exceeding the forecasted decrease by 0.117M barrels, while gasoline inventories fell by 4.5M barrels. However, these data failed to strengthen fuel quotes significantly, as investors' fear of an impending global recession, supported by poor production data in China and July inflation statistics in the UK, continues to prevail. Thus, the consumer price index reached 10.1% (the highest since 1982), which indicates high prospects for an economic downturn in the country, as previously warned by the Bank of England.
Additional pressure on the trading instrument soon may be exerted by the conclusion of a "nuclear deal" between Western countries and Iran, but the situation here remains uncertain. Yesterday, the authorities of the Islamic Republic responded to new proposals developed by EU diplomats, and this document is currently being studied in Washington and Brussels. Thus, the prospects for reaching an agreement and, as a result, bringing additional volumes of Iranian oil to the market remain.
The trading instrument fell below 87.50 (Fibonacci correction 61.8%, Murrey [2/8]), which gives the prospect of further decline to 81.25 (Murrey [1/8]), 75.00 (Murrey [0/8]). The key "bullish" level seems to be the resistance zone 93.75–95.45 (Fibonacci correction 50.0%, Murrey [3/8], the middle line of Bollinger bands). After its breakout, growth can continue to 102.50 (Fibonacci correction 38.2%), 112.00 (Fibonacci 23.6% retracement, Murrey [6/8]).
Technical indicators point to the continuation of the downward trend: Bollinger bands and Stochastic are directed downwards, while the MACD histogram is stable in the negative zone.
Resistance levels: 95.45, 102.50, 112.00. | Support levels: 87.50, 81.25, 75.00.