WTI extends losses nearing $82.00 on higher oil stocks and lower demand concerns


  • Oil prices accelerate their reversal as US stocks increase beyond expectations
  • The outlook of higher rates for a longer time is increasing concerns about a lower demand for oil
  • These fears have offset the impact of geopolitical risks.

Oil prices are going through a sharp reversal on Wednesday, to pare some of the gains taken over the last tree months. WTI crude futures broke lower on Wednesday after a period of hesitation hammered by the higher-for-longer Fed outlook coupled with larger-than-expected US oil stocks.

The weekly EIA report revealed that US Oil stocks increased by  2.735 million barrels. in the week of April 12, against expectations of 1.65 million, and from the 5,841 million barrels reported in the previous week.

This increase in crude stocks comes after Fed Chair, Jerome Powell, warned that the bank might still have work to do to bring inflation to the 2% target. These comments suggest that interest rates will remain at restrictive levels for a longer time, which is expected to depress economic growth and weigh on demand for Oil.

This has offset the positive impact on Crude from the increasing geopolitical risks and from news reporting a US threat to reimpose the ban on Venezuelan Oil if President Maduro fails to meet his commitment to fair elections this year.

The broader trend remains bullish although today’s bearish reaction is suggesting a deeper correction. A confirmation below previous highs at $82.85 puts the $80.50 area on the bears’ focus. On the upside, bulls should regain the $84.90 level to shift the focus back toward the YTD high, at $87.60.

WTI US OIL

Overview
Today last price 82.43
Today Daily Change -2.35
Today Daily Change % -2.77
Today daily open 84.78
 
Trends
Daily SMA20 83.76
Daily SMA50 80.2
Daily SMA100 76.76
Daily SMA200 79.5
 
Levels
Previous Daily High 85.67
Previous Daily Low 84.24
Previous Weekly High 87.03
Previous Weekly Low 84.01
Previous Monthly High 83.05
Previous Monthly Low 76.5
Daily Fibonacci 38.2% 84.79
Daily Fibonacci 61.8% 85.12
Daily Pivot Point S1 84.12
Daily Pivot Point S2 83.47
Daily Pivot Point S3 82.7
Daily Pivot Point R1 85.55
Daily Pivot Point R2 86.32
Daily Pivot Point R3 86.97

 

 

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