SINGAPORE: US oil may retest a support at $87.11 per barrel, a break below which may open the way towards $84.88.
The contract is riding on a wave c which may extend into $81.26-$83.50 range, as suggested by a bearish pennant.
The bounce triggered by the support at $87.11 could have very little impact on the this wave.
The bounce may extend. But the extension is expected to be confined within a range of $87.11-$90.72.
A break above $90.72 could lead to a gain into $91.84-$92.96 range.
On the daily chart, oil is riding on a wave C, which is capable of travelling into a zone of $62.89 to $71.76.
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A falling channel suggests a target at $71.76 as well. The drop seems be slowing around the support at $86.11. Oil may have entered a consolidation mode.
The consolidation could be a prelude to another round of deep fall.
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