WTI Crude Oil Could Hit Sub-$20 Levels Soon On Country Lockdowns

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The price of WTI Crude oil could hit sub-$20.00 levels soon amid the impact of the coronavirus pandemic and country lockdowns. The price of light crude oil appears to be trading in a consolidative triangle, which could lead to the next big breakout. 

If another breakout occurs under the current market conditions, it will most likely be bearish and this could pull the price of oil down below the $20.00 key level. The WTI crude price remains just below the 100-hour SMA while the 200-hour counterpart is a few pips higher.

WTI Crude Oil Fundamentals Overview

The price of the WTI Crude Oil is trading at the back of another pulsating period amid the coronavirus pandemic. Countries across the globe are shutting their borders. Others have announced total lockdowns, which effectively limit the movement of residents. This has affected businesses adversely, which in turn impacts the short-term outlook for the demand for petroleum products. Lockdowns also mean that now there is less demand for fuel, which means that gas companies will be looking to reduce their orders. In return, this will affect oil prices even more.

The latest round of crude oil stocks data was better than expected, which explains why prices consolidated just above $23.00. The API Crude Oil stocks data came in at -1.25M down from -0.421M in the previous week. On the other hand, the EIA crude oil stocks change report showed a stock balance of 1.623M barrels down from last week’s 1.954M. Analysts were expecting a balance of 2.77M barrels.

WTI Crude Oil Technical Analysis (the 60-min Chart)

Technically, the price of oil appears to be trading in a consolidative pattern formation. This comes at the back of a major plunge over the last two months. On Thursday, the light crude oil price bounced off the base section of the triangle to prevent it from crossing to oversold levels of the 60-min RSI.

The bulls will look to build on this rebound by targeting short-term profits at around $25.34 or higher at $27.48. On the other hand, the bears will target a retest of monthly lows at $21.25 or lower at $19.12.

WTI Crude Oil Technical Analysis (the Daily Chart)

In the daily chart, the price of oil appears to have recently made a sharp plunge. It fell from a high of $65.68 reached at the start of the year to bottom at 20.77 last week. The latest rebound creates room for more declines.

The bears will target long-term profits at sub-$20 levels of about $17.67. On the other hand, the bulls will look to push for a recovery towards $29.88 or higher at $36.33.

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