WTI Crude Oil Price Analysis for June 23, 2022

WTI crude oil is still on the decline but is approaching a key support level that could spur a bounce. Price is closing in on the $95-100 major psychological levels that might keep losses in check.

Technical indicators seem to be pointing to a bounce. The 100 SMA is above the 200 SMA to suggest that the path of least resistance is to the upside or that support is more likely to hold than to break. However, the gap between the indicators is narrowing to reflect weakening bullish momentum and a potential bearish crossover.

A break below the support area could set off a steeper selloff for the commodity.

Stochastic is already indicating oversold conditions or exhaustion among buyers. The oscillator is starting to pull higher to reflect a pickup in bullish pressure. Similarly RSI is in the oversold region and is slowly moving north, so crude oil price could follow suit as bulls take over.

Crude oil is on weak footing, as the American Petroleum Institute reported a build of of 5.607 million barrels while analysts predicted a draw of 1.433 million barrels.

This amounts to the first build over 5 million barrels since mid-February, as the US released 6.8 million barrels from the Strategic Petroleum Reserves in Week Ending June 17.

The Energy Information Administration is projected to report a draw of 1.6 million barrels.

Note that the commodity has been on the rise ever since the EU confirmed its plans to embargo most of Russian oil by the end of the year. This means that the region would have to source the commodity elsewhere, leading to a potential energy crunch.

Meanwhile, the OPEC has struggled to meet its output goals, even as the cartel raised its production agreement in order to keep a lid on crude oil prices.

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