Oil is up, demand fears are here!

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WTI analysis – 21 May 2020

By: Ahura Chalki

Oil is growing up in past days, as production cut plan, goes well. Mohammed Barkindo, OPEC Secretary-General in his latest interview mentioned that market had a positive reaction to the production cuts, which powers the bulls of the market. On the other hand, reduce voluntary production from Saudi Arabia, Kuwait, and UAE also helped the markets positively, while U.S. Baker Hughes Oil Rig Count dropped to 258 last week, which is the lowest level of past 38 years and it was the reason of lower inventory levels of the US crude oil, in API and EIA weekly report.

On the other hand, still fears of demand existing in the market, factories are not working with their full capacity, new car sales dropped into very low levels (-67% in the EU) and travel restrictions still limiting the flights, one of main WTI users.

Today, the PMI data from the EU and US, besides Fed chair Powell Speak are in the spotlight.

WTI technical overview – H1

RSI sloping lower to 70, from the OB area of 80, signaling the decreased trend strength, while the price moves exactly on the OVB trend line, trying to breach lower. $33.33, the 20-HMA is the key support at the moment, while it is trading above this level, supports the bulls, and breaching lower, can send the price deeper.

Pivot point: 33.02

Resistance levels: 34.50 / 35.20

Support levels: 32.30 / 30.38

Today, the expected trading range is between 30.38 support and 35.20 resistance.


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