Traders, WTI crude oil plunged dramatically nearly 2%, mostly weighed down by a softer demand outlook and boosting crude oil inventories. The growing inventories are also overshadowing expectations of ongoing OPEC-led supply cuts.

Things You Should Know Today

1- A day before, the US crude inventories swelled by 4.9 million barrels.
As per the American Petroleum Institute (API), the inventories missed the forecast of 481K barrels drop. Indeed, investors are likely to trade Crude oil with bearish sentiments as API, and EIA reports are mostly correlated.

2 – Besides the US inflation report, the market’s focus stays on EIA’s crude oil inventories, which are due after the release of US CPI. Crude Oil Inventories are due at 14:30 GMT. Economists are expecting a draw of -1.0M vs. 6.8M previously. Let us recall, the API and EIA reports have a correlation. Therefore, the market is likely to keep crude oil bearish until the release of actual figures.

3- Technical aspect of crude oil also suggests a bearish bias. For instance, the 2-hourly charts are signaling a strong bearish trend in crude oil. Crude oil has violated the long-held support level of $53 to trade around $52 zone.

As per the technicals, oil prices have a high potential to further drop until 51.86. On the lower side, a bearish breakout can extend price oil prices towards 50.60, and that’s the level where we can expect some bullish trends.

Good luck!