It seemed like crude Oil was going to turn bullish, as the US economy starts to rebound while China is reopening after three years of restrictions and lockdowns. For the trading week, the price is down about -4%. WTI started the week above $79 and reached a high of $80.60.

But, Oil was slowly slipping lower since Monday, unable to make new highs, and on Friday the selloff picked up, sending the price to $75.32, closing the week around $3.05 down. Looking at the daily chart, the selloff on Friday stalled near the 61.8% retracement of the February trading range before retreating back to the upside. WTI crude was rejected by the 100 SMA (green) on the daily timeframe, which has been doing so twice before, so it seems like the downtrend is resumed again, given that the highs keep getting lower.

The Energy Information Administration (EIA) reported one of the largest buildups in U.S. crude Oil inventories last week, as they jumped to the highest level since June 2021. On the supply side, Russia is cutting 500k barrels/day from March, but that didn’t help Oil prices much, since the current OPEC+ deal to cut Oil production by 2 million bpd would be locked in until the end of the year.

The Biden administration has plans to release more Oil from the country’s Strategic Petroleum Reserve which will likely limit any rallies that develop in coming weeks. So, the pressure has turned to the downside for Oil once again for the time being, and the odds for the FED to raise interest rates further this year are not helping the situation. Markets are pricing in more hikes by the FED as the economic data from the US shows improvement this year, which is an added risk to Oil buyers. We are turning bearish on Oil and will try to sell retraces higher on the smaller timeframe charts.