Oil edges lower as attention turns to Doha meeting

Crude oil prices retained the negative tone during the past Asian session, weighed by the large increase in US stockpiles. US West Texas Intermediate futures fell to $40.82, but bounced back during London trading hours, only to resume its decline in the US session, to end the day a few cents above $41.00 a barrel.

Hopes that the Doha meeting next Sunday to freeze oil output, will come to fruition have diminished somehow, and still any probable effect it has on the commodity will likely be short-lived, as long as the imbalance between supply and demand persists.

WTI technical view

“Technically, the daily chart shows that, despite turning lower, the price is still well above its 200 DMA, currently in the 38.90 region. In the same chart, the Momentum indicator heads north above its 100 level, while the RSI indicator retreated partially from near overbought level, and heads south around 63,” said Valeria Bednarik, chief analyst at FXStreet. “In the 4 hours chart, the price is currently pressuring a bullish 20 SMA, while the Momentum indicator turned sharply lower and is about to cross its 100 level towards the downside, indicating a continued decline, particularly on a break below 40.80 the immediate support.”

Support levels: 40.80 40.20 39.60. Resistance levels: 42.30 42.90 43.60.