Crude Oil Daily Forecast – Crude Takes Pause From Slide

Crude has reversed directions on Thursday and has recorded gains. Currently, U.S. crude oil is trading at $23.37, up $0.81 or 3.49% on the day. Brent crude oil is trading at $25.67, up $0.60 or 2.18%.

Oil Steadies on Selling Exhaustion

U.S. crude prices have melted this week, with losses of close to 30 percent. However, traders were greeted with some positive news on Thursday, as crude has moved slightly higher. Is this respite just a temporary blip, or will we see a recovery in prices? Investors could well be in a ‘wait-and-see’ mode, notes Edward Moya, senior market analyst at OANDA. “After a 24% crash, oil prices are firming up on some selling exhaustion and as U.S. and European leaders unleash … aid and stimulus”.

ECB Announces Stimulus Package

The massive slide in the financial markets has galvanized action on both sides of the pond. In the U.S., the Trump Administration has unveiled plans to boost the economy with a massive stimulus package, which is estimated at some $1 trillion. The package is expected to include direct payments, deferred payments and tax breaks. The plan will require Congressional approval, and Treasury Secretary Mnuchin warned that if the package is not approved, unemployment could skyrocket as high as 20 percent.

Over in Europe, the ECB has finally taken off the gloves after sitting on its hands during the past few weeks. This lack of action resulted in heavy criticism against ECB President Christine Legarde. On Wednesday, the ECB announced a 750 billion euro asset purchase program to combat the financial turmoil caused by COVID-19. The program, called the Pandemic Emergency Purchase Program (PEPP) will last until the end of 2020.

Technical Analysis

Cure continues to put pressure on support at 22.62. This is followed by support at 21.37, which is protecting the symbolic number of 20.00. On the upside, there is weak resistance at 24.20. This is followed by resistance at 26.80.