The price of WTI Crude Oil went from hitting hurdles and remaining at the high levels of its quarterly chart to quickly falling below important support levels last week.
At the open this week, the price of WTI Crude Oil will be close to the USD 77,930 ratio, which was last traded significantly on March 13. WTI Crude Oil, which has been flirting with higher prices and testing resistance regularly over the past month, suddenly found increasing selling pressure. When the 82,000 price level was lowered on Tuesday, the momentum did not slow down and the 81,000 target started to appear and already on Wednesday this level was also surpassed.
Wednesday’s trading in WTI Crude Oil saw a fall from just above 81,000 to 79,000. The downward pressure was not over yet, there were slight returns to the upside on Thursday and Friday, but the selling continued and the 80,000 price level seemed further away as traders began to close their offices for the weekend.
Supply remains abundant and WTI Crude Oil is calm.
While the media continues to highlight conflict in the Middle East in many cases, savvy energy traders have shown they are calm and paying attention to fundamentals that show crude oil remains plentiful and there are no shortages. Even if peace has not been achieved in our time, developments in the Middle East did not inflame speculation last week.
The drop in US GDP numbers last week may have played a role in WTI Crude Oil’s ability to see a decline in prices. Big players may be more cautious about pursuing long positions if they believe the U.S. economy is about to enter a full-blown recession.
Production levels and technical prospects for the future.
While WTI crude oil inventory remains efficient and supply from large producers continues, some analysts indicate that OPEC may make production changes at upcoming meetings to counter faltering prices. However, traders should understand that OPEC meetings will not be held until June 1st and production levels will not see dramatic changes until then. The question now for WTI Crude Oil is whether it will maintain values below USD 80,000 in the coming days.
- Sell-oriented traders will need to pull quarterly technical charts to look at lows last traded in the second week of March.
- While the 77,000 level is certainly important, the price of WTI Crude Oil could begin to test an irregular range between 77,000 and 79,000 in the near term.
- The ability to drop to lower prices with considerable speed last week is noteworthy, and speculators should monitor the start of trading in WTI Crude Oil this week to gauge current behavioral sentiment.
WTI Crude Oil Weekly Outlook:
The speculative price range for WTI Crude Oil is between 75,200 and 82,600.
If the 77.250 level starts to get tested and the move sustains lower depths, it could be a rather intriguing speculative battle. Any trade below the 77,000 level could set off alarm bells and cause technical traders to discount lower values seen via semi-annual charts. Before WTI Crude Oil traders say that anything below USD 75,000 is too low, they should remember that the commodity actually tested values below the 70,000 level quite consistently from mid-December through early of the second week of January.
The downtrend in WTI Crude Oil, which began in mid-April, also coincides with nervousness around USD trading highs and concerns about the US economy. Yes, reversals could definitely be seen in WTI Crude Oil, but traders cannot bet on a one-sided direction to follow. However, the resistance above, after being tested in the next few days, could present a selling opportunity for WTI Crude Oil for speculators who manage their risk-taking tactics well and believe that the downward pressure is stronger.
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