WTI Crude Oil Futures (NYMEX: CL) shed 11.45% week-to-date to trade at 15-Month lows in Wednesday’s session. Market sentiment has been in panic following the second and third biggest U.S. bank failures since the 2008 Financial Crisis, as the crisis has triggered concerns of a potential recession and oil demand depletion.
Risk assets have experienced a broad sell-off as traders look to safe-haven assets such as the Greenback and Gold. Despite the sell-off, an upbeat demand outlook from OPEC’s monthly report could support crude oil prices in the future. China’s demand is expected to surge due to resumed air travel and China’s economic reopening.
Following a breakout below the ascending channel pattern and 100-day moving average, WTI Crude Oil Futures plunged, breaking through various support levels. The rejection of the $66.10 per barrel (BLL) level formed support, while the $72.70 level formed resistance.
With price trading near support, a rejection could entice bulls into the market, with the $72.70 BLL level earmarked as a probable point of interest for a bull case. The level coincides with the 61.80% Fibonacci Retracement Golden Ratio and could potentially be a sound resistance level due to its confluence with the an earlier support level prior to a breakout below.
Alternatively, if bears continue to storm into the market, a high volume breakout below the $66.10 BLL level could prompt further bearish price action, with the $64.00 BLL round number level a potential point of psychological interest in a bear case.
With the banking sector crisis still weighing on the market, high levels of volatility will likely play on the market for the coming days or weeks. Weathering the storm by staying out of the market is probably the safest strategy to employ currently. However, if bullish traders live by buying low, WTI Crude Oil Futures could be in a good position to stage a recovery.
Sources: Reuters, TradingView