Deeper prices, despite the EIA report!

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WTI analysis – 14 May 2020

By: Ahura Chalki

The Energy Information Administration’s (EIA) weekly report confirms that the Crude Oil inventory level of the US, lowered by -0.745M, while the forecast was more than 4M. After the Report, WTI jumped above $26.50. However, worries about the second wave of COVID-19 weighed on markets, especially after Mr. Powell’s speech, where he mentioned about longer return period, much longer than expectations. For the Oil market, still, everything is about supply and demand. The current level sounds like a fair price for now, since despite the high risk of reopening of businesses, most developed countries trying to keep the way, which they started from last week. EU countries, step by step reopening their borders, which will increase the level of travels and demands for the Oil market. Besides that factories are back into works as well, so, very slowly increase in demand, can help the market in longer-term to move positively.

For today and after FED chair speech, stock markets are under pressure, and it can reduce the growth rate.

WTI technical overview – H1 Chart

OBV trend line has been breached, changed into side movement, RSI at 51, and the price at the middle line of BB also supporting side movement for now. Still, $26 and $24, are key resistance and support levels.

Pivot point: 25.50

Resistance levels: 26.25 / 27.16

Support levels: 24.58 / 23.82

Today, the expected trading range is between 24.58 support and 27.16 resistance levels.


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