oil supply

Bidders are active in today’s June WTI crude oil futures market, driving prices higher by more than $0.75 per barrel. It appears that bargain hunters have stepped up and gone long from $61.00 in an attempt to join the uptrend in oil pricing.

A Dead-Cat Bounce For June WTI Crude Oil Futures?

Thursday was a dismal session for energy bulls, as was last Friday, 26 April. Prices of June WTI  crude futures plummeted by more than $2.00 per barrel in the 36 hours following Wednesday’s EIA report. At the moment, the bleeding to the downside has stopped. However, many industry insiders are beginning to view the $65.00-$67.50 zone as being a potential yearly top for WTI crude oil. This belief is gaining even more traction given the recent builds in supply.

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

As they always do, big-round-numbers are likely to play a key role in WTI pricing. This week’s bottom of $60.95 is an important price point and may set up as an intermediate-term swing low. Conversely, here are several resistance levels to watch for the near future:

  • Resistance(1): Bollinger MP, $63.03
  • Resistance(2): 38% Current Wave, $63.10
  • Resistance(3): Daily SMA, $64.02

Overview: As we roll deeper into May, I expect bidders to take over the WTI market. Nonetheless, formidable resistance is set up in the vicinity of $63.00. If today’s rally stalls out in this area, and $60.95 is taken out early next week, then a washout under $60.00 will become a very real possibility ahead of the Memorial Day holiday.

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