- Oil recovery continues to falter as US reserves pile up.
- OPEC-led alliance to cut production to meet rising demand has largely failed but could be underpinning WTI at 60.00.
Crude oil is declining again and WTI is nearing 60.75 as the fossil fuel's recovery has stalled out. Equities and commodities took a big hit on Tuesday following Trump's firing of his own Secretary of State, and revelations that Trump will also be seeking an additional $60B in tariffs aimed squarely at China.
Further complicating the picture for oil is the US's continued over-production that is flooding global supply. Rig counts have fallen recently but the US is still on pace to become the world's largest producer of crude oil, overtaking Russia in the top spot sometime this year or next. OPEC has been working hard to try and stem the flow of oil pouring into global reserves, but the build-up is already at peak levels and the problem is only expected to get worse when the US begins to sell off millions of barrels of oil from the US strategi supply under orders from Trump, who intends to use the proceeds in an attempt to shore up the US budget deficit.
The American Petroleum Institute stated on Tuesday that American petroleum reserves are currently sitting just beneath half a billion barrels, and the continuously-expanding supply has many fossil fuels traders lamenting the passing of 'peak oil' in January when WTI was nearing 70.00/barrel.
WTI Crude Technicals
WTI continues to shift lower on Daily candles as oversupply takes the constraint premium off oil; after years of OPEC-led supply control, markets are flooded with more barrels than demand can hope to keep up with. H4 charts have steadily declining highs applying pressure to current price action, and the 60.00 major psychological level could begin to give way soon. Support is currently coming from that last swing low at the 60.00 handle and February's low of 58.05, with resistance at the last two swing highs, 61.80 and 62.30 respectively.
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