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Crude Oil Bounced off 50% Fibonacci Level – What’s Next?

U.S. crude oil continues to trade bullish despite an unexpected rise in crude oil inventories last week. What’s going on here and what can we expect from crude oil now? Let’s find out…

WTI Crude Oil – Fundamental Outlook

On Wednesday, the EIA (Energy Information Administration) reported a build of a 2.2m barrel vs. a previous draw of 1.1m and a forecast of a 1.6m draw. As I explained in my previous update, WTI Crude Oil Gains Support above 67.50, there’s a positive correlation between the EIA and API reports. On Tuesday, the API (American Petroleum Institute) reported a build of 1.099m barrels vs a previous draw of 1.047m. Having said this, the rise in crude oil inventories was already priced in and the market reversed back after a slight dip to $67.25.

 

WTI Crude Oil – Technical Outlook

At the moment, crude oil is trading above the 50% Fibonacci retracement level which is supporting this commodity above $67.25. This level is important because the 50-period exponential moving average is also supporting this price zone.

Crude Oil - 240 - Min Chart

Overall, oil prices are playing in a choppy range with an upper limit of $69.45 and a lower limit of $67.25. So, the idea is to go with the flow. It will be nice to stay bearish below $69.50 while remaining bullish around $67.50. Good luck!

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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.
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