The price of WTI Crude Oil has recovered from the negative territory to surge above $17.00 following this week’s massive plunge. Oil prices plunged to -$50 per barrel on Monday before bouncing back shortly to trade at just above the $6.00 level.
The price of oil has since traded in a rising consolidative wedge. However, that trend appeared to come to a halt on Friday as the light crude oil price traded within a tight range just above the $17.00 level.
WTI Crude Oil Fundamentals Overview
From a fundamental perspective, the price of oil is trading at the back of a highly volatile period in the market. Earlier in the week, reports showed a prospective decline in demand for oil amid a rapid rise in stocks. This signaled a potential oversupply with questions cropping up regarding the storage of excess stocks. However, as experts pointed out, this was a mechanical problem rather than a material quandary. Oil prices have since surged to top $17.00 and are just a few levels below last week’s close.
Oil prices also continue to face significant pressure from the coronavirus pandemic while long-term demand remains in question. There are also some price wars from the Persian Gulf with Saudi Arabia and the rest of OPEC members yet to agree on tentative production cuts. On Wednesday, the EIA crude oil stocks balance beat the expectation of 15.15M with 15.022M. Earlier in the week, the API weekly crude oil stocks had shown a slight increment to 13.226M up from 13.143M in the previous week.
WTI Crude Oil Technical Analysis (the 60-min Chart)
Technically, the WTI Crude Oil appears to be experiencing a lack of directional momentum. This comes following a sharp recovery from the plunge earlier this week. Oil prices have now climbed off the oversold levels of the 14-hour RSI in the 60-min chart.
The bulls will be looking to extend the current recovery towards last week’s $18.66 or higher at $20.22. On the other hand, the bears will be looking to capitalize on the short-term weakness by targeting profits at around $15.09 or lower at $13.26.
WTI Crude Oil Technical Analysis (the Daily Chart)
In the daily chart, the price of the WTI crude oil appears to be pegged within a sharply descending channel. This indicates a long-term bearish bias in the market sentiment. The recent rebound has pushed oil prices from oversold levels of the 14-day RSI in the daily chart.
The bulls will be looking to extend the current rebound towards $29.42 or higher at 40.52. On the other hand, the bears will target long-term profits at around $6.41 or lower.