Crude trading in Asia has continued the quiet tempo of the overnight session as markets await data due later in the week.
Oil’s price action continues to suggest that a slow price correction is underway as both contracts posted yet another lower high for the 4th day in a row. WTI closed unchanged at 56.70, but Brent fell 0.80 % to close at 63.25, perhaps reflecting its stronger speculative inflows of recent times.
The technical indicators are somewhat less extreme this morning, but the RSI on both Brent and WTI remain very overbought. An ideal situation for bullish traders would be for both contracts to gently fall over the course of the next week to alleviate the situation, rather than a potentially ugly short-term correction. Whether this happens or not is still to be seen, and the first hurdle will be tonights American Petroleum Institute (API) Crude Inventories followed by the official U.S. Crude Inventories tomorrow evening. The talk will then increasingly turn to the formal OPEC/Non-OPEC meeting in Vienna on the 30th November.
Brent remains unchanged at 63.25 in Asia with the twin daily double tops at 64.40 and 64.85 unchallenged. Support is initially at 62.70, the overnight low, with a break opening up a test of 62.00. Critical long-term support is the triple daily bottom at 60.10, 60.00 and then trendline support at 59.65. This area should be the base of any corrective selloff.
WTI trades at 56.65 in moribund Asian trading with the overnight high at 57.10 the first resistance. Having traced out a series of lower highs, last weeks 57.80 level remains unchallenged resistance. The overnight low of 56.15 will be the first support with a break opening up clear air all the way to the 54.50 area.
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