Crude Oil Struggles After a Feeble Bounce

NYMEX:CL1!   Light Crude Oil Futures
Crude oil futures slid sharply in the second half of 2022. Now after a feeble bounce, is there more downside risk?

The first pattern on today’s chart is the price area near 81.30. It was a weekly low in mid-October where prices struggled in early December, early January and again in recent sessions. That could make some traders think old support has become new resistance.

Second, the price level represents a 50 percent retracement of the move between a weekly closing high in early November and the December low.

Third, the early November peak occurred near the 100-day simple moving average (SMA). Oil prices have been stalling there again in late January.

Next, stochastics are retreating from an overbought condition.

Finally, the fundamentals could be weakening as U.S. inventories inch higher. This week’s OPEC+ meeting is also expected to bring no change in production, even as Russian exports increase.

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