Today, in the Asian trading hours, WTI crude oil prices erased some previous day gains but are still trading in the bullish territory while taking around near the $32.15 per barrel, having hit a high of $33.06 on Monday. That was the highest level since March 16. However, oil is trading in a confined range as investors are nervously waiting and preparing for a possible re-run of May contract’s last trading day wherein oil prices faced the deeper losses for the first time since records were kept. Elsewhere, crude oil recovered approximately 30% in the last three days and is currently up over 200% from the lows observed in April. As of writing, WTI Crude oil is currently trading at 32.12 and consolidating in the range between 31.13 and 32.91.

As we already mentioned, the June WTI contract expires on the day, but there is no major sign of a repeat of the historic fall below zero seen a month ago, mainly due to the signs that demand for crude oil is recovering gradually.

The recovery in oil prices could be attributed to the improvement in demand after most countries loosened lockdowns to control COVID-19 virus impact and tried to restart their economies. The OPEC+ also promised production cuts, in effect since May 1, and many countries have pledged further production cuts from June onwards after being motivated by Saudi Arabia, which has also exerted some bullish impact on oil prices.

The US production is also declining, with crude production from seven major shale productions expected to decrease by a record of 197,000 barrels per day in June to 7.822 million barrels per day. This would be the lowest since August 2018, as per the Energy Information Administration.

WTI Crude Oil – Trade Setup 

US oil’s bullish trend continues to dominate the market, but recently, oil is trading within the sideways range, holding mostly below 32.94 area. On the lower side, support stays at 31.15 level. A bearish breakout of 31.16 level can extend selling until 30.40. Bearish bias can dominate today.

Good luck!