WTI down 1.7% to $83.17 on the day

Price is trading around the lows for the day as oil is struggling to keep its recent upside form going, seeing some exhaustion around the $84 to $85 level.


Of note, the latest drop is seeing price fall below its 100-hour moving average (purple line) and nearing a potential test of its 200-hour moving average (green line) @ $83.07.

The fall in the past few hours now indicates that the near-term bias is more neutral and a break below the latter support level will see sellers seize near-term control though there is some minor support around $82.97 as seen above.

But drop below that and there isn't much in the way of a potential pullback towards the 20-21 October lows next @ $80.79 to $81.30. That will be a key region to watch before price potentially slips back towards testing the pivotal $80 mark.

I'm still on the camp siding with more solid oil fundamentals over the next few months but I'm not going to be one to rule out any possible technical correction - even a sharp one - after the run of gains over the past few months especially.

Adding to that is we're seeing more of the big boys jumping on the bandwagon (calling for $100) and that is always a cautionary tale. There is scope for some profit-taking leading to a technical correction but when the dust settles, expect dip buyers to come back in strongly and drive up prices once again.

For now, there is some exhaustion to the upside momentum so it isn't too clear yet but a drop below $80 could spark further outflows in the short-term before buyers step back in.