Oil prices have dropped to their lowest level since the end of March, nearing a critical support level.
The price of WTI crude fell to $80.60 in Monday morning trading. A month ago, the price found support in the $80.0- $80.50 range, then accelerated higher breaking through the resistance of the upward channel. Last week's sell-off pushed the price back into this range.
![Image 1](https://production-app-asset.traderknows.com/images/45593f22e3f54ca09509491a98d2667d.width-800.png?Expires=1728129572&Signature=EmeWCR7jxJ1iPDatScX-NeXnRcDKvL0Rh3Smg3HjfG6RtEdRc1HxUcGWeOjrBk4dSG3Y9PPR-qtFzGgJ78RKplYooUYRR8rBGK7WOGvWCyks9vhUXwpudsFmwEdsfLDPhH-QhYt3FuPAOVOtL9GTTgrqdi-fLh5DQ~hToOPp4pQloZnRsMDNUI-RL3Ok2poJC83SRdDiCtrbZoZB1zQ7ONsfY0Mnse2yLAvtfxqhhRZ2j5pB6CLvGlf5i58E9SueZ4eptO9ZHsZfLZF7CnJtjWy~2L2RFwsyaLM3PoGbLLdtCRv1G8BFZ9s2HcxmwOGGm4yhaNAnHz6WMdIjwM3fyg__&Key-Pair-Id=K3LHBTUA5A7KEY)
FxPro senior analyst Alex Kuptsikevich noted: The macroeconomic background is unfavorable for bulls: U.S. oil inventories are rising, the number of oil drilling rigs has reached its highest level since September last year, and the International Monetary Fund (IMF) expects OPEC+ quotas to start increasing from mid-year. The dollar is strengthening, and stock indices are falling, which adds pressure on oil prices.
![Image 2](https://production-app-asset.traderknows.com/images/4de2e6dbd8804a15bc2f3c0608f3151e.width-800.png?Expires=1728129572&Signature=eqeJCLR1BNJD1o7QRSn-M-EmwdF652jleZOp~La33SPoLU6UD7Nkgjq1i-7dIwiyW7ZSQSehvGayzgHDBtA2HB1ubZA9NGBcwC2NVtU~oCnkLs6YqWWn9fIc1~rWSCfFvIdmJ32wRx5kcjpLvRHoypM3Ozzp8R0ypJAKsW98e0LOL2ZbD4FN1zDnd-hZL5oMY53jT3-V5eDczcHxQvzMq5jvEL0Ut41AlJqS2i9QmHHJfOQqVkzpVM-29sWJPq~1JJwiT7s9GxYb5DL-OzA66e0zuV4dbiRvsxaQJ8~GmAQUY-nuqxx6Z7Lo7dOLR3AW8dGsyunwwcC6ih1LEJKeLg__&Key-Pair-Id=K3LHBTUA5A7KEY)
Oil prices are testing the 50-day moving average (currently at $80.60 per barrel). A January closing price above this level triggered a three-month rally.
The 200-day moving average is just below $79.60, less than a dollar away. Breaking below this index could signify a change in the long-term trend. Over the past two years, the market has seen significant volatility upon touching the 200-day average: either decisively breaking through it or rebounding sharply.
Recently, the 200-day moving average coincides with the 61.8% Fibonacci retracement level from the December low to the April high. If oil prices drop below $70 per barrel, it would mean a resumption of the long-term downtrend, pulling prices back to cyclical lows. If it manages to stay above the 200-day moving average, it means the Fibonacci level will extend, with potential upside targets near $100.
Therefore, the oil price trend in the coming days is worth watching by traders and investors, as it will determine the long-term trend.