Oil Price Analysis: WTI continues to be under pressure and breaks $42 per barrel
|- WTI trades 2.82% lower and has now broken below USD 42 per barrel.
- DoE crude oil inventories produced a draw of 9362K vs exp -200K.
WTI 4-hour chart
There was a decent draw noted in the latest weekly round of Department of Energy data (DoE) in the US. Much of this was expected due to hurricane Laura and yesterday's API figure (-6.4mln) also hinted at the same. The market is also dealing with the increase in supply from the OPEC+ group following the recent production increase noted last week.
The chart below shows the price has now printed below USD 42 per barrel. The next major support lies at the red level at USD 41.27 per barrel. For now, there is the chance that the price could come back and test the black trendline it has broken to the downside before continuing lower.
Unsurprisingly the indicators have turned bearish. The MACD histogram is firmly in the red and the signal lines have plunged below the zero line. The Relative Strength Index is below the 30 level and now in oversold territory.
The market is still in an uptrend but recently the rate of change to the upside has stalled. The price has made a lower high lower low formation and now a break of the aforementioned support could be a confirmation signal that more downside is to come. The travel sector is still struggling to recover from the COVID-19 pandemic and a vaccine still seems to be some way off. For now, it seems that the liquid gold could correct further.
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Additional levels
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