US oil may fall into $71.53-$72.40 range

SINGAPORE: US oil may break a support of $73.04 per barrel and fall into $71.53-$72.40 range.

The contract has broken a rising trendline and a key support of $73.80. The break confirms the extension of the downtrend towards a range of $70.08-$70.14.

A pullback towards the trendline has been missing. The current bounce triggered by the support of $73.04 could be such a pullback.

It is not very clear how far this pullback could extend. Most likely, it will be limited to $74.61. On the daily chart, oil is falling steadily towards $71.76.

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After bouncing twice from around this level in December 2022 and January 2023, the contract is unlikely to bounce the third time. It may break this support in its first attempt and drop more towards $62.89-$67.33 range.