WTI Crude Oil Experiencing Bearish Pressure Around $40.00 Level

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The price of WTI Crude oil is experiencing intense bearish pressure around the $40.00 level despite a promising US crude stocks change report. The oil price slipped to retest monthly lows of about $38.70 on Thursday before recovering to top $40.50 on Friday. Later in the day, the light crude oil fell again to trade at around $39.75 before making a late recovery to $40.40.

The bears retain short-term control in a descending channel. Today’s late rebound prevented oil prices from falling to oversold levels of the 14-hour RSI in the 60-min chart. It remains several levels below the 100-hour and the 200-hour SMA lines.

WTI Crude Oil Fundamentals Overview

The light crude oil is trading a time when the coronavirus pandemic continues to dictate the movement of global financial markets. There are fears that a second wave could send global economies crashing as the world continues to search for a vaccine. The adverse economic impact of COVID-19 has been worse than many anticipated a few months ago. This continues to restrict global travel and business activity, which in turn limits the demand for crude oil and other fuel products.

The OPEC+ deal to reduce output through December this year has helped but that now appears to be already priced into the price of oil. In the US, the API crude oil stocks for the week ending July 24 came in at -6.829M a massive improvement from the previous week’s balance of 7.544M. On Wednesday, the EIA Crude oil stocks change reports showed a balance of -10.612M barrels, which beat the expectation of 0.357M.

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

Technically, the WTI crude oil price appears to have run out of steam after an extended rally ended last week. Since the start of this week, oil prices have been going down with notable rebounds of lower lows.

The bull will be targeting the next rebound at around $40.99 or higher at $41.55. On the other hand, the bears will look to extend the current trend by targeting short-term profits at around $39.76 or lower at $39.17.

WTI Crude Oil Technical Analysis (the Daily Chart)

In the daily chart, the price of WTI Crude Oil appears to be facing strong resistance around the $0.00 level on its way up. The light crude oil is on recovery after a massive plunge between January and April this year. 

The bulls will be targeting long-term profits at around $44.92 or higher at 76.40% Fib level at $51.68. On the other hand, the bears will look to pounce at around 50% and 38.20% Fib levels at $36.08 and $29.09, respectively.

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