WTI bulls finding tough opposition but price holds support on $56 handle

• WTI has advanced by 0.34% on the day but remains anchored.
• The price has been capped by the 200-day moving average

The price of oil has tried to correct but bulls have found strong opposition and the price continues to decline in the face of ongoing concern over global growth amid trade conflicts which remains the top concern of investors.

WTI has advanced by 0.34% on the day but remains anchored within the lower end of the $55.85 and $56.96 range. The futures contract at least made some ground following a near 11-million-barrel drawdown in crude inventories yesterday, with front-month September delivery gaining 25 cents, or 0.4%, to trade at $56.12 a barrel. 

The downside in the price of oil came in the wake of reports that Saudi Arabia had met with Kuwaiti officials and had discussed ramping up oil production in the southern neutral zone. This, coupled with poor global PMIs, a very bearish outlook for the eurozone from ECB's President Mario Draghi and poor manufacturing data earlier in the week has weighed on oil. This all makes next week's meeting between trade China's and US's negotiators timely and even more critical.

WTI levels

The price has been capped by the 200-day moving average. On the downside, a break of support located on the rising support line of the channel at 55.80, opens 54.60, (61.8% Fibo.) and, on the wide, the 14th Jan 50.41 lows ahead of the 26th November lows, located at 49.44. On the upside, a push through 57.40 and the accumulation of daily 20, 50 and 200 moving averages opens the 20-week moving average, bulls will then look to the 60 handle and double top in the 60.80s.