Oil prices on Wednesday fell by about 1% due to the fears that China-US trade war could trigger a global economic downturn, but relatively limited supply amid falling OPEC production and political tensions in the Middle East offered some support.
The prices were bolstered by reduced supplies led by the Organization of Petroleum Exporting Countries (OPEC) from the beginning of the year and political tensions in the Middle East.
OPEC and some allies, including Russia, are due to meet on June 25 and 26 to discuss exit policies.
Meanwhile, speculators once again reduced their net long positions in U.S. Crude futures and options last week.
Oil price technical analysis
Crude oil price recently recovered from the $57.50 support area against the US Dollar. The price climbed above the $58.50 and $59.00 resistance levels, but it struggled to clear the $59.50 zone.
A swing high was formed near the $59.55 level and the price recently declined below the $59.00 and $58.90 support levels. There was a break below a major bullish trend line with support at $58.85 on the hourly chart.
The price is now trading well below $59.00 and the 50 hourly simple moving average. Therefore, there is a risk of a downside break below the $58.50 support level in the near term.
Conversely, if there are is an upside correction, the recent supports near $58.85 and $59.00 are likely to act as a strong barrier. Only a close above $59.00 and the 50 hourly SMA could start another upward move towards $59.50.