SINGAPORE: US oil may test a resistance at $91.37 per barrel, a break above which could lead to a gain to $92.72.
The fall from the Feb. 4 high of $93.17 may consist of three waves. The second wave, the wave b, is unfolding. It is generally difficult to pinpoint the peak of this wave.
Most likely, the wave b could end around $91.37, to be reversed by the wave c.
Support is at $88.36, a break below which could confirm the continuation of the downtrend towards $85.92.
On the daily chart, oil temporarily stabilized around a support at $89.17.
Even though this support could trigger a bounce towards $91.50, a bearish target of $86.30 remains intact, as indicated by a rising channel.
The upper trendline of an expanding wedge proved to be effective in causing deep drops.
Oil is unlikely to break the spell this time.
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