The price of WTI Crude Oil plunged on Thursday to bottom at around $53.75 before recouping some of the session losses late on. This decline comes barely three days after the price of oil advanced to trade close to $57.00 following an extended rally.
The price of Light Crude oil has been on a bullish run since the first week of this month as it continues to trade within an ascending channel. However, today’s plunge pulled the oil price below the support trendline signaling a potential bearish breakout.
WTI Crude Oil Fundamentals Overview
From a fundamental perspective, the WTI Crude oil is trading at the back of a disappointing EIA report, which missed expectations by a mile. On Wednesday, the EIA Crude Oil Stocks Change report showed a balance of 5.702M barrels for the week ending October 25, which was massively higher than the expected change of 0.494M barrels.
In the previous day, the API Crude Oil stock report showed a balance 0.592M barrels for the week ending October 25, down from 4.5M barrels in the previous week. And on Thursday, the EIA Natural Gas Storage followed its counterpart the WTI Crude oil with 89B up from 87B in the previous week and above the consensus estimate of 86B.
These figures were not helped by Thursday’s Federal Reserve rate cut. The Fed cut the funds rate by a further 25 basis points to 1.75% down from 2.00% but did not provide guidance on whether there will be more rate cuts this year.
WTI Crude Oil Technical Analysis (the 60-min Chart)
Technically, the price of WTI Crude Oil appears to have recently bounced off the oversold/normal trading zone border following today’s massive plunge. However, the rebound appears to be lacking momentum, which means the decline could continue in the coming days.
Therefore, the bears will be targeting profits at around $53.75 or lower at $53.24. On the other hand, the bulls will look to pounce on short-term profits at around $54.61, $55.05 or higher at $55.43.
WTI Crude Oil Technical Analysis (the Daily Chart)
In the daily chart, the WTI Crude oil continues to trade in a consolidative bearish wedge. The price of oil has recently made a major pullback and now appears t be headed towards the strong support baseline down below.
Therefore, the bulls will be more optimistic going into the next week and they could target long-term profits at around $52.49 or lower at $50.49. On the other hand, the bulls will hope for an immediate rebound by targeting long-term profits at around $57.44 or higher at $59.24.
In summary, the price of oil appears to be trading under strong bearish pressure in the long-term, but in the short-term, the bulls are battling to retain control after the latest pullback.