West Texas Intermediate rebound ends in a dead cat bounce
The West Texas Intermediate (WTI) bearish streak was reignited after plummeting -3% Wednesday as the Group of Seven (G7) nations considered a price cap on Russian oil above the current market level while gasoline inventories in the United States built by more than analysts expected.
According to the Energy Information Administration, U.S. gasoline stocks rose by 3.1 million barrels, far exceeding the 383,000-barrel build that analysts had forecast.
Elsewhere, Prices were hit further by reports that the G7 price cap on Russian oil could be above the level at which it is trading.
G7 nations are looking at a price cap on Russian seaborne oil in the range of $65-70/a barrel, according to a European official on Wednesday.
Because production costs are estimated at around $20 per barrel, the cap would still make it profitable for Russia to sell its oil.
Based on the technical assessment, the Relative Strength Index (RSI) 3-day ‘lookback’ indicator is negative. The Moving Average Convergence Divergence (MACD) supports negative bias. The ADX indicator supports a bearish trend.
The rejection from the region of $81.80-95 now turns the attention to $74.80-95. Reassess from there.
Daily Chart - West Texas Intermediate (WTI)
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