WTI Crude Oil Pushes Toward $20.00

It’s the final trading day of April and WTI crude oil is back on the bull. Prices of June futures have broken above $17.50 and appear destined to revisit $20.00 in the near-term. While the oil market remains severely depressed, things are beginning to look up for producers. 

Right now, the global oil complex is on the wrong end of the supply/demand curve. Stocks on hand have reached epic proportions and serious questions remain facing post-COVID-19 demand. However, this week’s oil inventories reports suggest that the tides may be turning. Here is a quick look at the EIA and API supply figures:

Event                                         Actual                 Projected          Previous

API Crude Oil Stocks               9.978M                     NA                 13.226M

EIA Crude Oil Stocks               8.991M                  10.619M          15.022M

This week’s figures suggest that supplies-on-hand are still robust, but may be on the downswing. If so, spring seasonality is likely to drive WTI crude oil prices north in the coming weeks.

WTI Crude Oil Takes Out 38% Fibonacci Resistance

The past three days haven’t been too bad for June WTI crude oil. ETF liquidations ran prices to a low near $10.00 early Tuesday; since then, we have seen prices nearly double.

Here are a few levels to watch for June WTI ahead of the weekend:

• Resistance(1): Psyche Level, $20.00
• Resistance(2): Bollinger MP, $22.22
• Resistance(3): 62% Retracement, $22.97

Overview: From a technical standpoint, a bearish bias continues to be warranted toward June WTI crude oil futures. However, the dynamic is shifting. If we see a weekly close above $16.68, a test of topside resistance north of $20.00 will become highly likely in the short-term.

Tomorrow marks the first trading day of May ― be ready for a directional move as institutional energy players take positions heading into the spring buying season.