Markets

US oil to drop to $46.71

Published January 12, 2015 Updated January 12, 2015 05:58am

SINGAPORE: US oil is expected to drop to $46.71 per barrel as it has broken a support at $48.38.

The support was at the 150 percent Fibonacci projection level of a downtrend that developed from the Dec. 1, 2014 high of $69.54.

The next support will be at $46.71, the 161.8 percent level, a break below which will lead to a further loss to $44.65, the 176.4 percent level.

A sudden surge above $48.38, now a resistance, could signal the previous break was false, and the 138.2 percent level at $50.04 could be approached again.

It seems that oil is still riding on a steady downtrend, which is extending towards a long-term target at $36.74. For a quarterly outlook, click on.

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Copyright Reuters, 2015