WTI Crude Rejects $60.00 On First Test - Forex News by FX Leaders
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WTI Crude Rejects $60.00 On First Test

Posted Tuesday, March 19, 2019 by
Shain Vernier • 1 min read

The futures contract rollover in WTI crude oil has been kind to bulls, driving prices to a proximity test of $60.00. During the U.S. overnight, May WTI crude rallied to a session high of $59.86. Sellers stepped in an defended the $60.00 handle with vigor. At press time, price has fallen more than $0.75 and is approaching the $59.00 level.

It is Tuesday and that means the weekly oil inventory cycle is getting ready to commence. This week’s figures are widely expected to extend the trend of shrinking supply. Here is a quick look at projections:

Event                                        Previous    Projected

API Crude Oil Stocks                -2.58M            NA

EIA Crude Oil Stocks                 -3.86M       -0.775M

Analysts are looking for supply to decrease, just not on the same level as in weeks past. Be on the lookout for a larger-than-expected drop in the EIA number and the API to post another negative figure.

WTI Crude Oil: Technical Outlook  

Today’s proximity test of the $60.00 handle was a welcomed sight for energy bulls. Even though the level was defended ferociously by heavy selling, this market appears poised to go higher.

May WTI Crude Oil Futures (CL), Daily Chart
May WTI Crude Oil Futures (CL), Daily Chart

Overview: For the intermediate-term, I will be carrying a bullish bias in the WTI crude market. The spring buying season is in full effect and $60.00 is likely only a speed bump on the way to $70 or $75 per barrel. Given OPEC production cuts, a relaxed FED, and positive U.S. economic fundamentals, the table is set for a two-month grind north for WTI.

Of course, getting on the action is going to be a challenge. It will be wise to wait for a pullback to downside support before diving in. Buying from a Fibonacci retracement level or moving average will be an ideal way to take a long position n coming sessions.

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About the author

Shain Vernier // US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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