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Oil continues struggle to start the week, sellers stay in near-term control

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Oil down in the early stages of the week but selling pressure is contained

WTI

The low today hit $70.97 in the past hour but oil is seeing a light bounce back to $71.30 now as price is down 0.2% today.

Sellers remain in near-term control after having breached below both key hourly moving averages yesterday. The 200-hour moving average (blue line) @ $72.04 is the first key level that buyers need to break back above to wrestle back some control.

But at least for now, the drop to start the week is also contained by the 38.2 retracement level @ $70.72 as well as the 26 July low @ $70.55.

Those act as minor support areas for oil as recent headlines concerning the spread of the delta variant across the globe aren’t helping with the demand outlook in oil.

I still view short-term support at the $70 mark as perhaps being an area where dip buyers may lean on but that will largely depend on risk sentiment over the next few days.

Given the more cautious undertones, there might not be such strong bids layered at the figure level this time around as compared to before.

That said, any fall back towards the 100-day moving average, now seen @ $67.03, is one that will once again attract dip buyers more strongly and that presents an attractive proposition to scale in on longs as long as the fundamental backdrop remains intact.

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