West Texas Intermediate (WTI) continues to crush supports as supply jitters persist – Bears will continue seeking stop-losses
West Texas Intermediate (WTI) crude oil prices slumped below $70 a barrel on Wednesday, back to an area last visited since June, as a larger-than-expected draw in weekly U.S. inventories failed to charm the bulls back into the market as concerns about supply continue to rattle traders.
Overnight data from an industry group, the American Petroleum Institute, showed that oil inventories grew 594,000 barrels in the week to Dec 1, compared to expectations for a draw of over 2 million barrels.
Weekly U.S. crude inventories fell by 4.6M barrels, compared with estimates for a decline of $1.03M, while gasoline supplies jumped by 5.4 barrels, well above expectations for a build of 1M.
At the Nov. 30 meeting, OPEC+ agreed to voluntary output cuts of about 2.2 million barrels per day (bpd) for the first quarter 2024. But at least 1.3 million bpd of those cuts were an extension of voluntary curbs Saudi Arabia and Russia already had in place.
Based on the technical outlook, the Relative Strength Index (RSI) 3-day ‘lookback’ indicator is negative and is oversold.
The Moving Average Convergence Divergence (MACD) oscillator is negative. The ADX (trend) indicator supports a bear trend.
With the crushed $70.20-45 levels, it now exposes $67.10-25 as further stop-losses are expected. Reassess from there.
Daily Chart West Texas Intermediate (WTI)
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