Oil Price Analysis: WTI dipps to $41 again ahead of API inventories later in the session

• WTI trades 1.46% lower on Tuesday as there is a distinct lack of key drivers.
• Once again downside momentum has stalled at USD 41 per barrel.

WTI 1-hour chart

Price action in WTI has stalled over the last couple of sessions between a high of USD 42 and a low of USD 40.60 per barrel. There is a clear lack of news flow and additional drivers from the market since the OPEC+ group agreed to taper the output cuts by 2 million barrels per day in August and September. 

The chart has a broadening pattern at the moment and these can be very hard to trade. At the moment the support zone is at the blue line near USD 40.60 per barrel. The next resistance is at the green line and this is the median area of the consolidation zone. Above that USD 42 per barrel is the last level the price would need to break if it to attach the recent high at USD 42.52 from 21st July. 

The indicators are very mixed at the moment. The Relative Strength Index is near the oversold area but the price wave is a higher low. This is called a bullish failure swing and is normally a positive divergence. The MACD histogram is in the red but both the signal lines have not crossed the midpoint. Overall the price has made its first lower high lower pattern in a while and this could be the start of a fall. A good confirmation could be if the USD 40.60 per barrel support level breaks. Later in the session, this could all change as the market will get the latest API inventory levels and last week the figure printed with a build of 7554K.

Additional levels