Crude Oil’s Sideways Trading Range Continues – Sell High & Buy Low
Today in the early Asian session, WTI crude oil prices were flashing red and dropped after three straight days of gains as coronavirus travel bans and lockdowns badly hit demand. As of writing, oil prices are currently trading at 23.50 and consolidating in the range between 23.41 and 24.65.
However, a US $2 trillion emergency stimulus will likely support economic activity. Oil prices failed to get support from the news that the US Senate reached agreement on the $2 trillion relief package. The West Texas Intermediate (WTI) fell 37 cents, or 1.5%, to $24.12 a barrel. Both contracts are down about 60% this year.
WTI crude oil demand is continuing to take a hit mainly due to the COVID-19 pandemic seriously travel bans and more countries order lockdowns to stop the spread of the disease. India, the second-most populous country and the third-largest oil consumer in the world, started a 21-day lockdown yesterday.
Whereas, the Energy Information Administration (EIA) announced a rise of 1.6 million barrels in US crude inventories in the week ended March 20. The raise is much smaller against the analyst expectations of a 2.8 million increase, as per the latest report.
The American Petroleum Institute (API) estimated a draw of 1.247 million barrels for the week ending March 21 yesterday. At the USD front, the US dollar still trading under pressure due to uncertainty concerning the $2.2 trillion COVID-19 Bill.
Looking forward, investors will pay little attention to the economic calendar due to the absence of oil-related events. However, the US unemployment claims and the final reading of the 4th-quarter (Q4) GDP could offer fresh moves.
Daily Support and Resistance
S1 20.58
S2 22.61
S3 23.75
Pivot Point 24.64
R1 25.78
R2 26.66
R3 28.69
WTI is facing resistance around 25.92, crossing below the pivot point level of 24.79. Closing of candles below this level is exposing oil prices until 22.79 and the double bottom support level at 27.92. Violation of this double top level may lead WTI crude oil prices towards 21.8. The idea today is to stay bearish below 24.79 with a target of 21.70 and a stop loss of over 25.25.
Good luck!
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