Crude Oil Update – Pressured by Gasoline Demand Concerns

June West Texas Intermediate crude oil futures are called lower as investors continue to react to a jump in U.S. fuel inventories. On Wednesday, the U.S. Energy Information Administration’s weekly inventories report for the week-ending April 21 showed a draw in crude oil stocks, but gasoline inventories surged as refiners produced more fuel than the market would consume.

Prices could continue to fall if gasoline stocks keep rising, due to expectations of lower demand. If the low demand continues into the driving season then crude oil inventories could also rise.

Technical Analysis

The main trend is down according to the daily swing chart. The current downside momentum suggests sellers are taking aim at the main bottom at $47.58.

Forecast

Based on the current price at $48.66, the nearest resistance is a price cluster at $49.14. Look for a bearish tone as long as crude remains under this price.

If the downside momentum continues then look for the selling to extend into the next uptrending angle at $48.36. This is the last potential support angle before the $47.58 main bottom.

We could sit in a range if $48.36 and $49.14 holds as support and resistance respectively, but look for the downside bias to continue on a move through $48.36 and for an upside bias to begin on a sustained move over $49.14.