The price of oil refreshed current lows at $27.34 per barrel closer to multi-year lows of $26.05reached in early 2016 as price wars took a toll. The price of WTI crude oil appears to be trading under extreme bearish pressure and recently went through a downward price gap, which pushed it to oversold levels of the RSI.
It has since recovered slightly to head back to the normal trading zone with bears moving to cover their shorts.
WTI Crude Oil Fundamentals Overview
From a fundamental perspective, the price of light crude oil is trading at the back of major events. The recent OPEC meeting held last week failed to yield positive results with Russia failing to agree to Saudi Arabia’s proposal. Since then the Saudis have launched what the market has termed as price wars through a rapid increase in supply. Meanwhile, Russia continues to hold its position regarding potential production/supply cuts.
The impact of the coronavirus cannot be overlooked. Since it hit the market at the start of the year. It has continued to spread causing havoc. This has threatened to trigger another global financial crisis, which is not good for the oil market.
The latest oil production/stocks report also disappointed. The API crude oil stocks report edged higher to 6.4 million barrels up from 1.69 in the previous week. On the other hand, the EIA crude oil stocks change reports showed a balance of 7.664 million. The market was expecting a balance of 2.266M.
WTI Crude Oil Technical Analysis (the 60-min Chart)
Technically, the price of oil appears to be struggling. The WTI Crude Oil has plunged recently amid oil price wars and coronavirus. It is now closer to 2016 lows, which came at the back of major collapse. The recent attempt to recover has proofed to be fruitless, which makes 2016 lows a realistic target for the bears.
They will target short-term profits at around $30.62 or lower at $27.83. On the other hand, the bulls will target rebound profits at around $35.87 or higher at $39.06.
WTI Crude Oil Technical Analysis (the Daily Chart)
In the daily chart, the WTI Crude Oil appears to have recently made a sharp bearish breakout off a consolidative wedge formation. This has pushed it to oversold levels of the daily RSI indicator. It could trigger the next rebound in the price of oil with the bears looking for cover.
The bulls will target long-term profits at around $44.40 while the bears will target the 2016 lows of $26.05.