FXStreet (Córdoba) – Oil prices dropped below $40.00 a barrel on Wednesday ahead of key OPEC meeting on Friday, with investors expectant about whether the organization will cut output to stabilize prices.
Recently a senior OPEC official stated that it is unlikely to reduce production if non-OPEC countries do not also cut as well, contradicting earlier reports citing Iranian press suggesting the majority of the members agreed on an output reduction.
Dollar appreciation amid prospects the Fed will announce a rate hike later this month, also weighed on the commodity, sending WTI to its lowest settlement in three months.
WTI technical perspective
“The commodity traded as low as 39.82 ahead of the US close, and the daily chart shows that the price has fallen sharply after failing to advance beyond a bearish 20 SMA, whilst the technical indicators head strongly south below their mid-lines, indicating some additional declines ahead”, said Valeria Bednarik, chief analyst at FXStreet. “In the 4 hours chart, the technical readings favor a continued decline, given that the price is accelerating below a strongly bearish 20 SMA, whilst the technical indicators head sharply lower, entering oversold levels at the time being, with no aims to change course anytime soon”.
Support levels: 39.70.39.20 38.50. Resistance levels: 40.60 41.25 41.
(Market News Provided by FXstreet)