WTI futures, capped below $90 after hitting lows at $88.40. (Pivot Orderbook analysis)

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• WTI futures, capped below $90 after hitting lows at $88.40.
• Concerns of a globel recession offset the impact of output cuts.
• The increase of COVID-19 infections in China is adding negative pressure on oil.

The pair currently trades last at 88.62.

The previous day high was 92.63 while the previous day low was 89.59. The daily 38.2% Fib levels comes at 90.75, expected to provide resistance. Similarly, the daily 61.8% fib level is at 91.47, expected to provide resistance.

WTI futures’ recovery attempt from intra-day lows at $88.40 has been unable to extend past $90 on concerns that a global economic recession might slash demand for oil.

Crude prices are retreating for the second consecutive day on Tuesday. Investors are increasingly concerned about the potential impact of a global recession combined with the sharp monetary tightening cycle assumed by most of the major central banks.

Furthermore, news about a sharp increase of COVID-19 cases in China’s major cities, following the Golden Week Holiday, have increased fears about a decline on oil demand. Local authorities have reportedly,closed schools and tourist attractions, reviving lockdown memories.

The sourer investors’ mood has offset the bullish impact triggered by the production cuts announced by the OPEC+ last week. The club of the world’s largest oil suppliers agreed to reduce oil production by 2 million barrels per day, the largest cut since the outbreak of the COVID-19 pandemic, which sent crude prices skyrocketing.

From a technical perspective, WTI has broken the near-term bullish channel from September 22 low, to find support at $88.40, with next potential downside targets at $86.50 (mid-September highs) and $85.55 (October, 5 low).

On the upside, crude prices should regain the psychological level at $90.00 to build up bullish momentum and aim towards the 50-hour SMA at $91.50 ahead of $93.00 (intra-day high).

Technical Levels: Supports and Resistances

XTIUSD currently trading at 88.62 at the time of writing. Pair opened at 89.86 and is trading with a change of -1.38 % .

The pair is trading above its 20 Daily moving average @ 84.12, above its 50 Daily moving average @ 87.34 , below its 100 Daily moving average @ 96.74 and below its 200 Daily moving average @ 97.01

The previous day high was 92.63 while the previous day low was 89.59. The daily 38.2% Fib levels comes at 90.75, expected to provide resistance. Similarly, the daily 61.8% fib level is at 91.47, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 88.76, 87.65, 85.72
• Pivot resistance is noted at 91.8, 93.74, 94.84

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