- Following a dip in yesterday’s trade, sparked by an unexpected build in U.S. crude inventories, West Texas Intermediate crude remains under pressure on a techncial basis, although fundamentals lean bullish.
- WTI is currently trading at $62.21bbls and has travelled in a range of between $61.91bbls and $62.75bbls, spot.
The price of oil is at a crossroads on a techncial basis with momentum indicators leaning bearish while fundamentals continue to support a bullish argument which brings the 70 handle into the picture – at least that futures price action is pointing towards, on track for the fourth gain in the past five sessions and to roughly five-month highs as markets speculate on a positive outcome between Sino/US trade talks taking place in Washington this week, with an anticipated deal and closure to lengthy trade dispute between the two largest conomies in the world
However, an unexpected rise in U.S. crude inventories with the Energy Information Administration saying that crude inventories rose 7.2 million barrels to 449.5 million barrels in the week ended March 29, leaving them at the five-year average helped to cap prices considering the consensus forecast was for a drop of 100,000 barrels. That, coupled with a bearish technical argument, prices are struggling to get over the line, being the 63 handle ahead of a techncial Fibo target.
WTI levels
Daily stochastics remains overbought and 4HR momentum has extended lower with the price unable to get over the line, being the 63 handle with the 61.8% Fibo as a key target in the 63.70s, meeting Jan 2018 support. Bears could well be inclined to push from here back towards a test of the 200-DMA, and if this does not hold, bulls could well be trapped in a long squeeze to cloud support and the rising wedge’s support line. A break of the support line and below $57.80 opens the case for a continuation of the bear trend that would target below the $42 handle and late Dec lows.
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