WTI retreats to $90.50 low after a five-day rally

• WTI Oil peaks at $93.60 and retreats to $90.50 area.
• Oil prices decline on profit-taking, economic concerns.
• The near-term positive trend remains intact while above $90.50 .

Front-month WTI prices have retraced half of the last Friday’s jump on Monday, returning to levels below $91.00. The US oil benchmark has broken a 5-day rally, deprecianting from 5-week highs at $93.60 to the mid range of $90.00.

Economic concerns and profit-taking weigh on oil prices

Crude prices have retreated beyond 2% on the day after the September Chinese Caixin Services PMI, released last week, showed a decline to 49,3, from 55 in August, casting shadows about the prospects of global demand for crude.

Furthermore, the sharp oil rally seen last week, which pushed prices 17% higher ,could have triggered some profit-taking movements that would have added negative pressure on prices.

Monday’s reversal has offset last week’s bullish momentum triggered by the production cuts announced by the OPEC+. The club of the world’s largest oil suppliers decided to slash oil production by 2 million barrels per day, the largest production cut since the outbreak of the COVID-19 pandemic, which sent crude prices skyrocketing.

WTI crude, testing support level at $90.50 area

From a technical perspective, WTI process might find suppot at the 50-hour SMA, now at $90.50, which has contained previous reversals over the last week, and would keep the near-8.2% term bullish trend intact.

Below $90.50, next potential targets would be $90.00 psychological level and mid-September highs around 86.50.

On the upside, above $93.00 (intra-day high) WTI prices might be aiming for $94.45 (38.2% retracement of the June – October decline) and then $97.25 (August 29 high).

Technical levels to watch