SINGAPORE: US oil may seek a support at $71.96 per barrel and resume its uptrend thereafter.

The drop on Monday could be due to a completion of a five-wave cycle from the June 17 low of $69.77.

This cycle is a part of a bigger wave III, which looks far from complete.

A projection analysis reveals a resistance at $74.14, the 38.2% level, which triggered the drop. Oil is expected to end its correction around $71.96, a break below which may cause a fall to $71.28.

On the daily chart, the correction is considered as an accumulation of the bullish momentum to break a resistance at $74.89.

Key support is at $71.93, which is near $71.96 (hourly chart), a break below which may open the way towards $67.14-$69.17 range, as indicated by a rising channel.

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