Oil prices remained steady on Monday as the US sought to replenish strategic reserves, providing support from further decline. However, concerns persist about oversupply and weaker fuel demand growth in the coming year. Despite OPEC+ pledging to cut production in the first quarter, investors remain skeptical about compliance, as non-OPEC output growth is expected to lead to excess supply next year. The recent price weakness drew demand from the US, which plans to refill its Strategic Petroleum Reserve in 2024. Chinese data showed rising deflationary pressures, raising doubts about the country's economic recovery. This week, investors are also watching for guidance on interest rate policies from central bank meetings (Fed, BoE and ECB) and US inflation data.
On the technical side the price has found sufficient support on the lower band of the Bollinger bands and is currently testing the support area of 78.6% of the weekly Fibonacci retracement level while the Stochastic oscillator is in the extreme oversold levels indicating that a correction to the upside might be seen in the following sessions. On the other hand the moving averages are showing an overall bearish momentum in the market which is likely to continue in the near short term if there is no crossing of the faster moving average (50 days) above the slower one (100 days).
On the technical side the price has found sufficient support on the lower band of the Bollinger bands and is currently testing the support area of 78.6% of the weekly Fibonacci retracement level while the Stochastic oscillator is in the extreme oversold levels indicating that a correction to the upside might be seen in the following sessions. On the other hand the moving averages are showing an overall bearish momentum in the market which is likely to continue in the near short term if there is no crossing of the faster moving average (50 days) above the slower one (100 days).