The WTI crude oil prices dropped to $25.90, mainly due to the price-positive API data, which revealed a rise in U.S. crude inventories. The tensions about a potential second wave of coronavirus cases after countries starting to ease lockdowns also keep the oil prices under pressure.
Moreover, China’s war with the U.S. and Australia also weighed down on the oil market. At this moment, the WTI crude oil is currently trading at 25.36 and consolidates in the range between the 25.07 – 25.79. The weekly announcement of a private stockpile report from the American Petroleum Institute (API) indicates a build of 7.64 million barrels versus the prior extension of 8.44 million barrels into the stockpiles.
The idea for recent support in the oil prices could be connected to the further request by Saudi Arabia for more extensive output cuts to balance the market induced by virus-induced demand disruption. The recent reopening of major economies’ confidence also supporting the oil prices.
On the other hand, the United States started once again to announce the new claims of coronavirus following easing coronavirus restraints and revived nonessential businesses in U.S. states as per the previous FDA Commissioner Dr. Scott Gottlieb. Whereas, China and South Korea are also fighting to control second wave outbreaks that spread during the weekend, While, Korea showed 26 new cases on May 12. As in result, the oil demand could face further crisis ahead.
Recently, the Energy Information Administration announced Wednesday that U.S. crude stockpile report which slipped by 700K barrels for the week ended May 8.
Daily Support and Resistance
- S1 22.23
- S2 23.74
- S3 24.66
Pivot Point 25.25
- R1 26.16
- R2 26.75
- R3 28.26
The U.S. oil is consolidating at 26.04 within a symmetric triangle pattern, which is rendering tripe top resistance at 26.70 along with support at 25.10 and 24.10. While bullish crossover of 26.70 may lead to WTI prices towards 27.30. Good luck!