- Summary:
- Crude oil price surge higher in the global market and clear major resistance at $58.66.Can the bulls retain the control of this market?
Crude oil price started its bullish rally after hitting the critical support at $51.05, low of 3rd October. The bulls were having a tough time in clearing up the major resistance at $58.66. Moreover, a couple of failed attempts from the crude bulls indicated weakness in bullish momentum. Things changed drastically after Prince Abdullaziz bin Salman sated Saudi might continue to under-produce to stabilize the market. Crude oil prices surged higher and secured a new top at $59.84 on 6th December. However, a bearish correction might take place before we see another extended rally from the crude bulls.
If the bearish correction takes place, Crude oil price might drop towards the 38.2% Fibonacci retracement level at $57.97(drawn from the low of 29th November to high of 6th December). A daily closing of the price below the $57.97 market (38.2 retracement level) might push the crude index towards the 61.8% retracement zone at $56.85.This level might play a crucial role since crude price breaking below this level might result in a retest of medium-term bullish trend line support at $55.75. On the contrary, the recent drop in China’s export is also giving a headache to the optimistic buyers since the demand for oil might fall. So, expecting a bullish rally based on Saudi prince statement might be an immature act. Traders are advised to keep an eye on the key levels for finding favorable trading opportunities.