WTI crude oil price has dropped below $59 after the Saudi Energy Minister’s bullish press statement which confirmed that half of the Saudi oil supply that was lost due to the drone strikes had been restored.
However, production is expected to be restored fully by the end of September, according to the Saudi Energy Minister. WTI crude oil price is now at $58.92, representing a nearly 5% drop from today’s highs.
President Trump has also said it is no longer needed to release reserves from US emergency stocks.
Technical Play for WTI Crude Oil
The Fibonacci retracement trace from the swing high of April 23 to the swing low of August 7 indicates that yesterday’s price highs tested the 78.6% retracement level but failed to break above it. Today’s positive news for crude has now brought price down to the 50% retracement level (July 31 and September 10 highs in role reversal).
I expect that a break below the 50% Fibonacci retracement level will open the path to the 38.2%% Fibo price level of 56.75 (July 4 low and Aug 13/14 highs in role reversal).
On the flip side, failure to breach this level will lead to a retest of the 61.8% Fibo mark of 60.40 (July 1 and 12 highs).