WTI oil price drops below $70, reaching a new low for 2024

Oil prices continued to decline on Wednesday, falling below the key psychological level of $70 after a 5% drop on Tuesday. The WTI contract hit a new low for 2024, fueled by mounting concerns over global oil demand, exacerbated by Tuesday’s PMI data indicating continued weakness in the U.S. manufacturing sector. Additionally, optimism about a potential resolution to Libya’s production halt and OPEC’s decision to increase output starting in October contributed to the bearish sentiment.

The breach of the $70 mark strengthens the negative outlook, with technical indicators pointing to a fully bearish setup. However, oversold conditions could prompt a temporary pause or limited correction if the fundamental picture remains unchanged.

The former support zone at $71.50/60 has now turned into solid resistance, likely capping any upward movements and offering an opportunity to re-enter the downtrend. However, caution is advised if prices accelerate above the falling 10-day moving average at $73.86, as this could temporarily sideline the bearish momentum.

Res: 70.00; 70.77; 71.60; 72.00
Sup: 69.17; 68.79; 68.00; 67.70