Crude Oil trades weak on rising US shale Oil production, good to sell on rallies
- Major Support – $57.60 (100- day MA).
- US oil took support near 100- day MA and shown a mild recovery above $60 level. The commodity jumped till $60.80 yesterday. The main reason for declining crude oil prices was due to increase in shale oil production and also Opec raised non cartel oil production growth forecast for second month. Oil hits low of $58.05 and is currently trading around $59.24.
- International energy agency mentioned that extraordinary growth in US shale oil will force Opec to change its policy stance soon. US oil rigs rose by 26 to 791 highest level since 2015.
- Technically, the pair is facing resistance around $60-60.12 (hourly Kijun-Sen and trend line joining $61.60 and $ 60.79) and any minor jump till $60.80 can be seen only above that level. Any break above $60.80 will take the commodity to next level till $61.35 (38.2% fibo)/$62.07.
- On the lower side, near term support is around $58.90 and any violation below will drag the commodity till $58.05/$57.60.
It is good to sell on rallies around $59.85-90 with SL around $60.80 for the TP of $58.05/$57.60.