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Crude Oil Price Forecast – Crude Oil Markets Sideways During Inventory Figures

By:
Christopher Lewis
Published: Jun 10, 2020, 15:53 UTC

Crude oil went sideways during the inventory build in the U.S. as came out much higher than expected, perhaps tempered by lowest production numbers in 20 months.

Crude Oil WTI Brent

WTI Crude Oil

The West Texas Intermediate Crude Oil market fell slightly during the trading session on Wednesday, reaching near the $39 level and then pulling back. Ultimately, this is a market that is starting to react to the inventory build in the United States, which was over 5 million barrels. That being said, production is at the lowest pace it has been in 20 months, so that should continue to offer a little bit of support. Looking at this chart, we are right in the middle of the big gap, which has not been filled yet. The 200 day EMA is currently at the $42 level, and of course the top of the gap is at $41. I think we will eventually get there one way or another.

Crude Oil Video 11.06.20

Brent

Brent markets have pulled back a bit to test the $40 level again, an area that should be supportive based upon the fact that it was previous resistance. A move towards the $45 level is very possible, but we may pull back in the short term to find buyers, closer to the 50 day EMA. The $35 level underneath is an area that is supported, and I would be a buyer down there. If we do break down below there, then things could get rather ugly. We have not filled the gap yet, so from a technical standpoint it makes sense that eventually people try to push this market higher. If we were to somehow break above the 200 day EMA, that would obviously be extraordinarily bullish.

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About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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