Oil prices fell on Thursday on the expectation that members of the Opec cartel will step up production in the face of concern about supply from both Venezuela and Iran. Based on this, what can short-term traders expect? Gain insights with today’s 24 May WTI Crude Oil Price Technical Analysis.
24 May, OctaFX – WTI (oil futures on NYMEX) is extending its declines in the European session, as the bears now look to retest Wednesday’s low at $ 71.19.
Amid rising concerns that the OPEC members may seek to boost the output when they meet next month, in an effort to counter the output drop expected due to the Venezuelan crisis and prospects of Iran sanctions.
Bearish EIA crude stockpiles report adds to the weight on oil
The bearish sentiment around the black gold can be also attributed to an unexpected rise seen in the US crude stockpiles, as reported by the EIA on Wednesday. The US crude inventories rose 5.8 million barrels in the week to May 18, compared with analysts’ expectations for a decrease of 1.6 million barrels while gasoline stocks also posted a surprise build.
Meanwhile, the barrel of WTI failed to benefit from the weakness seen in the US dollar versus its main competitors, as negative fundamentals overshadowed. A weaker US dollar makes the USD denominated oil cheaper for the holders in foreign currencies and vice-versa.
24 May WTI Crude Oil Price Technical Analysis
According to Jason Sen, Director at DayTradeIdeas.com
“A good chance we see a decent correction now to ease overbought conditions & holding below 7220/25 today targets 7185, 7155 then best support at 7120/10. (WE BOTTOMED EXACTLY HERE!!). A bounce from here was expected on the first test & we did reach 7200 for a potential 80 ticks profit. However be ready to sell a break below 7100 targeting 7080, 8060 & perhaps as far as 7020/10 for profit taking on shorts. Above 7225 allows a recovery to 7280 with the big resistance at 7300/10.”
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