WTI Crude Oil Trades Sideways Despite Drop in Inventories

During Thursday’s Asian trading hours, WTI crude oil prices were looking directionless despite Wednesday’s decrease in the US inventory report. However, crude oil prices are still trading mostly unchanged on the day near $25.40. Technically, the 4-hour chart shows prices are confined between the narrowing price range represented by trendlines drawn from May 7 and May 13 highs and May 6 and May 7 lows.

The reason for the confined trading could be attributed to the risk-off market sentiment and second wave of coronavirus, which turned out to be one of the key factors that kept a lid on any gains in oil prices. At press time, WTI crude oil prices are currently trading at 25.82 and consolidating in the range between 25.20 and 26.00.

Thus, the breakout can’t be rejected because the US inventory report released on Wednesday showed the first decline in outputs since January. US crude inventories dropped by 745,000 barrels last week, the Energy Information Administration said, compared with analysts’ expectations in a Reuters poll for a 4.1 million-barrel rise.

For the time being, investors are cautious about placing any strong positions mainly due to the fear of coronavirus second wave caused by easing lockdowns. The reason for the risk-off market sentiment could also be attributed to the renewed concerns concerning the economic slowdown.

Daily Support and Resistance
S1 22.23
S2 23.74
S3 24.66
Pivot Point 25.25
R1 26.16
R2 26.75
R3 28.26

US oil is trading at 26.04 within a symmetric triangle pattern which is providing triple top resistance at 26.70 along with support at 25.10 and 24.10. While bullish breakout of 26.70 may lead to WTI prices towards 27.30.

Good luck!

ABOUT THE AUTHOR See More

Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

Related Articles

ExxonMobil plans investing $1 billion in Nigerian Oil Field

1 day ago

Save

Ghana buys Angolan crude, begins fuel production

1 day ago

Save

Oil Prices Eye $62 as U.S.-China Tariff Talks Boost Sentiment

2 days ago

Save

Comments

0 0 votes

Article Rating

Subscribe

Login

Notify of

new follow-up commentsnew replies to my comments

Please login to comment

0 Comments

Oldest

Newest Most Voted

Inline Feedbacks

View all comments