WTI oil futures (March delivery) have been stuck in a prolonged downtrend since June, posting a fresh one year-low of 70.30 in December. In the short-term, the commodity has begun another round of weakness, with the price dropping beneath its 50-day simple moving average (SMA).
The momentum indicators currently suggest that selling pressures are intensifying. Specifically, the MACD histogram has dropped below its red signal but remains above zero, while the RSI is flatlining below its 50-neutral mark.
To the downside, if the price extends its decline, immediate support could be found at the recent low of 76.20. Piercing through that zone, the commodity could challenge the 2023 bottom of 72.70. A break below that region may pave the way for the one-year low of 70.30.
On the flipside, should buyers regain control and push the price above the 50-day SMA, the recent resistance region of 82.65 might curb an initial rebound. Conquering this barricade, the bulls could aim for the November high of 92.50 before the 97.65 hurdle appears on the radar. Even higher, the price advance could cease at 102.00, which acted as both support and resistance in June.
In brief, WTI oil futures’ technical picture seems to be deteriorating as the price fell below the crucial 50-day SMA. For that bearish sentiment to reverse, the commodity needs to reclaim the aforementioned technical level.
