Oil Plunges to 2-Month Low After Inventory Report

Share news

West Texas Intermediate (WTI) fell broadly yesterday, dragging the price of Crude Oil to less than $46.00 a barrel following the release of the US crude oil inventory report. The technical bias has turned bearish because of a Lower Low in the ongoing downside wave.

Technical Analysis

As of this writing, crude oil is being traded near $45.93. A hurdle may be noted around $46.38, a major horizontal resistance area ahead of $48.20, another major horizontal resistance and then $50, the psychological number as demonstrated in the following daily chart.

Oil Plunges to 2-Month Low After Inventory Report

On the downside, the price of WTI is likely to find a support around $45.32, the intraday low of yesterday ahead of $43.49, the swing low of April 10th and then $40, the psychological number. The technical bias will remain bearish as long as the $50 resistance area is intact.

US Crude Oil Inventory

The Energy Information Administration (EIA) said crude stockpiles fell 2.2 million barrels for the week to July 1, just below a 2.3-million barrel decline forecast by analysts in a Reuters poll. While the EIA reported a seventh weekly decline in crude stocks, the figure it gave was far less than a 6.7 million-barrel draw cited by trade group the American Petroleum Institute in preliminary data issued late Wednesday.

Trade Idea

Considering the overall technical and fundamental outlook, buying crude oil on dips when we get a bullish reversal candle on a four-hour or daily timeframe still appears to be a good strategy in short to medium term.

Trade global forex with the best ECN broker of 2021*. Choose from 50+ forex markets 24/5. Open your FXOpen account now or learn more about making your money go further with FXOpen.

* FXOpen International, best ECN broker of 2021, according to the IAFT

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. FXOpen UK: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
FXOpen EU: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.