WTI OIL – bears are taking a breather; crude inventories report eyed for fresh signal
WTI oil price trades within narrow consolidation on Wednesday after strong bearish acceleration in past two days hit new 3 ½ week low at $67.02.
Thin daily cloud which twists today, reinforced by rising 100SMA, offered temporary support, where steep seven-day downtrend found footstep.
Oversold slow stochastic on daily chart supports the notion, signaling that bears may take a breather here, but firmly bearish techs and negative sentiment suggest limited recovery action.
Increased output from main world oil producers keeps oil price under pressure, with increase of weekly crude stocks (API report on Tuesday showed build of 0.63 million barrels vs 6.8 million barrels draw last week), further souring the sentiment.
Today’s release of EIA weekly crude stocks report is in focus (draw of 3.6 million barrels is forecasted vs previous week’s strong fall of 12.6 million barrels).
Tuesday’s high at $68.42 marks initial resistance while stronger upticks should be capped by converged 55/30SMA’s ($69.46), to keep bearish structure intact.
Final break below 100SMA would risk extension towards next supports at $66.36 (Fibo 76.4% of $63.58/$75.35 rally) and $65.71 (22 June low).
Res: 67.85; 68.07; 68.42; 69.46
Sup: 67.24; 67.02; 66.36; 65.71