WTI crude oil is trading inside a range on its 1-hour chart, finding support around $57.60 per barrel and resistance at $61.35 per barrel. Price appears to be on its way to test the top of the range from here.
However, the 100 SMA already below the 200 SMA to signal that sellers have the upper hand. This might be enough to take crude oil back to the bottom of the range again, especially since price is already moving below both indicators.
Stochastic has already reached the oversold region to signal exhaustion among sellers, and turning higher would mean that buyers are taking over. RSI is still on the move down to show that there is some bearish pressure present.
Sustained selling pressure could take crude oil below the range support and in for a drop that’s at least the same height as the rectangle pattern.
Crude oil prices took hits when the OPEC decided to gradually increase output, elevating global supply levels. However, demand could pick up accordingly while several economies lift lockdown restrictions. This could mean a rebound in business and consumer activity, which would support demand for fuel and energy commodities.
The EIA inventory report would likely impact volatility as well, with another reduction possibly leading to a bounce for the commodity. A build in stockpiles, on the other hand, would suggest that demand is still feeble and unable to keep up with stronger supply levels.
A draw of 2 million barrels is expected for the latest report, following the earlier reduction of 0.9 million barrels. The American Petroleum Institute reported a draw of 2.6 million barrels in the week ended April 2, while gasoline inventories rose by 4.6 million barrels and distillate stocks were up by 2.8 million barrels. A similar draw might be reported by the Department of Energy this week.