Oil is building an interesting support level at $50 a barrel. In early trading this morning, WTI is attempting a modest rebound, although the major trend remains bearish. It seems quite clear that investors are still cautious about taking any long position on oil as the impact of the coronavirus is unclear and could have a huge impact on oil demand.
Technically the price has broken through last week’s key support area of $51 and we are now moving in a risky area for WTI as a clear fall below the support zone of $50 could open doors for another sell-off. We would have a first positive signal if the price can recover to at least $52.20, while a rally to $54 set oil on course for a complete turnaround. However, as mentioned earlier, at this point the main trend remains negative.
