Oil flirts with bear market proposition today

  


WTI is down by more than 20% from its April highs

WTI 03-06
ForexLive

Price is down by over 1% today and that takes the total decline since the April high to more than 20% – signaling a bear market in the traditional sense among investors. The sharp declines on Thursday and Friday saw a break of the 100-day MA (red line) and that has put sellers back in control amid softer risk sentiment in markets right now.

The cautious/nervous risk-mood hasn’t dissipated completely since last week as US equity futures are also down by 0.5% but the “positive” takeaway is that Treasury yields are near flat levels still as we begin the session.

Much like last week, the bond market will be a key spot to watch again as we begin June trading so keep an eye on the reaction in Treasuries as that will be what drives sentiment not just in oil, but in the currencies space as well.

For WTI, further support is now seen closer to the 61.8 retracement level @ $51.62 next with swing region support seen around $51.00 to $51.30 as well. But ahead of the OPEC+ meeting to come in the next few weeks, be wary of the $50.00 handle as that will be a crucial psychological level if price starts gravitating lower. Buyers may have incentive to defend that in anticipation of OPEC+ announcing an extension of its output cuts deal.



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