Oil price nosedived today during the Asian session as storage capacity filled up. Oil price dropped to $11 per barrel, will decline again? What are the charts and technical indicators are saying? Read more to find further insights into today’s WTI Technical Analysis.
April 28, 2020, | AtoZ Markets – Oil is currently trading around $11 area and trying to push lower. After breaking below $16 area, Oil price dropped quite impulsively towards $11. As per the current scenario, WTI may require a retracement before decline further in the coming days.
Oil Price Dropped Due to Worldwide Storage Shortage
Oil price dropped with a concern about limited storage worldwide, and the expectation that Oil demand may rise slowly as COVID-19 pandemic lockdowns are gradually eased. Moreover, the U.S. West Texas Intermediate crude dropped by 14.7%, or $1.88, at $10.90 a barrel, and Brent crude futures down by 4.1%, or 82 cents, at $19.17 a barrel today.
On the other hand, Bjornar Tonhaugen, Head of Oil Markets at Rystad Energy, said on an interview with CNBC, “The market knows that the storage problem remains, and we are on a calculated path to reach tank tops in weeks. Actions are needed now as the problem stopped being theoretical and far away. The storage clock is ticking for producers, and we are approaching the final countdown if no further action is taken.”
Apart from this, Coronavirus pandemic has wiped as much as a third of global Oil demand, according to the calculations, which has pushed the price to tumble to record lows. Besides, Reid Morrison, PwC Oil and Gas Advisory Leader said, “The June contract is falling due to the reality of demand levels being well below current production levels and limited storage options. Choppiness in the markets will be significant as economies deal with lockdowns and returning to normal.”
WTI to Reach $1 per Barrel Again?
According to the 4-hour chart, WTI is currently residing near $11 area and trying to decline further. Oil current price action is quite non-volatile and impulsive, which may reach $9 area in the process. So, if the price reaches $9 area and bounce, the bulls may push the price higher towards $16. Alternatively, if the price breaks below $9 area with a 4-hour bearish close, the bears may continue further towards $1 again in the days ahead.
Image: Oil 4 Hour Chart
Furthermore, the dynamic level of 20 EMA is currently residing above the price, which may act as strong resistance to push the price down. Besides, the MACD lines are residing below 0.00 level, after having a bearish cross over. It indicates bears are still quite strong to sustain further.
To conclude, Oil price dropped as a concern of worldwide storage shortage. As long as the Coronavirus pandemic lockdowns are not going to ease, the WTI market may tumble further in the process.