wisepowder: Tumbling WTI Concerns for $41.30

wisepowder

WTI crude reported the largest one-day fall in three months on Wednesday, bottoming at $41.23 from the high level of $43.20. Oil prices have rebounded back overnight after breaching below the key support of $41.30, and are consolidating above $41.30 now.To get more news about WikiFX, you can visit wikifx official website.
　　The rally of the U.S. dollar index will become one of the important factors affecting oil prices. Meanwhile, the ADP said on Wednesday that the U.S. economy added 428,000 jobs in August. As the third largest increase of all time, it indicates that the U.S. economy is generally optimistic in the month.


　　Accounting for three-quarters of the U.S. economy, the service sector will embrace its data for August today, including the Markit's final reading of the Services PMI and the ISM non-manufacturing PMI. In addition, the non-farm payrolls for August will be published tomorrow. The overall markets, including the crude oil markets, are expected to suffer wild swings due to the data.
　　On the other hand, the EIA reported that the country's production of crude oil has reached a record low for the week ending August 28. At the same time, oil prices may be hampered as the market expectations that refineries will soon be shut down for equipment maintenance may further weaken the demand for oil and gasoline.
　　According to the daily chart, oil prices are consolidating around the level of $41.30 and expected to further test this key support in the short term, where a breach below may extend downside to $34.50 in the medium term. However, if oil prices stay constructive above the level, there is room for upside to challenge the resistance zone of $44.0-45.0.