Crude Oil Price Update – $26.04 Trigger Point for Acceleration to Downside

U.S. West Texas Intermediate crude oil futures are trading lower late in the session on Wednesday after the Energy Information Administration (EIA) reported the biggest one-week increase in U.S. crude oil stockpiles in history, as refiners throttled back activity due to slumping demand as a result of the coronavirus pandemic.

At 17:28 GMT, June WTI crude oil is trading $26.55, down $0.85 or -3.10%.

U.S. crude oil stockpiles rose by 19 million barrels the week-ending April 10, well above the 11.7 million-barrel estimate and offset some of the optimism that was generated as a result of a worldwide pact between oil producers to cut output sharply.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through $33.15 will change the main trend to up. Taking out the last swing bottom at $21.64 will signal a resumption of the downtrend.

The short-term range is $21.64 to $33.15. Its retracement zone at $27.40 to $26.04 is currently being tested. Trader reaction to this zone will determine the near-term direction of the WTI crude oil market.

Short-Term Outlook

Based on today’s price action and the current price at $26.55, the direction of the June WTI crude oil market into the close on Wednesday is likely to be determined by trader reaction to the Fibonacci level at $26.04 and the 50% level at $27.40.

Bearish Outlook

A sustained move under $26.04 will indicate the presence of sellers. If this move creates enough momentum then look for an acceleration to the downside with the next target angle coming in at $24.02.

Bullish Outlook

Holding $26.04 will indicate the presence of counter-trend buyers. After overcoming a pair of Gann angles at $26.30 and $27.15, the market could test a 50% level at $27.40.

Overcoming $27.40 could trigger a strong short-covering rally with the next downtrending Gann angle coming in at $30.15.