Global crude oil futures prices have eased data from the American Petroleum Institute suggesting that U.S. stockpiles rose by more than forecast last week. With WTI is edging higher $26 a barrel and Brent futures inched shy above $30 a barrel.
Technically, WTI crude price chart forms whipsaws pattern after brief rallies up to the peaks of $27.95 levels. Consequently, the bearish pattern halts interim upswings, while leading oscillators indicates faded strength, the price drop below 7 & 21-DMAs likely to expose more price slumps.
On a broader perspective, we could foresee no traces of recovery in the near future, price has tumbled below 7, 21 & 100-EMAs, it has retraced more than 88.6% Fibonacci levels of 2018 highs in this journey (refer monthly chart). While both leading & lagging indicators signal weakness on this timeframe.
OPEC and its allies intend to maintain existing oil cuts beyond June when the OPEC+ group is next due to meet to shore up prices and demand, which has been hit by the pandemic Covid19.
Hence, we advocated shorts in CME WTI futures contracts of far-month tenors with a view to arresting further dips, since further price dips are foreseen we would like to uphold the same strategy by rolling over these contracts for May month deliveries.
