Crude Oil turned bullish during most of January, after failing to push below the support zone above $70. Although, sellers returned last week after the failure to push above the 100 SMA on the daily chart which acted as resistance and eventually Oil resumed the downtrend.
The decline picked up pace this week, with OPEC meeting producing nothing new. So, even though the support zone at $70 hasn’t been broken and Oil hasn’t made a fresh low since December, the bearish trend remains intact. Besides that, the brief rallies since late 2022 have lacked any meaningful upward momentum, as the Relative Strength Index shows on the daily chart. The RSI has stayed under 50, indicating a bearish bias.
In the last two weeks, Oil prices have slipped lower after U.S. government data showed a big build-up in crude Oil, gasoline and distillate inventories, while OPEC and its allies stuck to their output policy. U.S. crude oil and fuel inventories rose last week to their highest levels since June 2021, the Energy Information Administration said, as demand remained weak. Oil inventories jumped by 4.1 million barrels last week to 452.7 million barrels, much larger than the 0.4 million barrel rise that analysts had forecast. It was the sixth straight weekly build, as refining utilization declined and net imports climbed.
Crude Oil 15 Min Chart – MAs Are Acting As Resistance
The downtrend has resumed again
So, all that has been weighing on crude Oil this week, besides the rate hikes by three major central banks. Today the decline resumed and US WTI crude reached $75, hitting our take profit target for our sell Oil signal, which we opened at around $71.50. We saw a bounce on the 15 minute chart and decided to take another shot as the 20 SMA (gray) was acting as resistance, while the previous candlestick closed as a doji, which is a bearish reversing signal.