Oil price fell on Monday during the Asian session with the concern of worldwide storage shortage. Oil price fall below $16, can WTI overcome the storage shortage? What are the charts and technical indicators are saying? Read more to find further insights into today’s WTI Technical Analysis.
April 27, 2020, | AtoZ Markets – Oil is currently trading around $15.60 area and trying to decline further. The price started trading with the bearish gap today, which is yet to fill up. As per the current scenario, WTI has been quite non-volatile with the current price action and may sustain further in the coming days.
Oil Falls Again as the Lockdown Extends Further
Oil storage shortage is raising concern that the production cut will not be enough to hold the collapse in demand. As the Coronavirus pandemic situation remains unchanged, Oil industry in a big concern that what they will do when all storages are filled up. Moreover, the U.S. Oil futures in losses after U.S. crude inventories rose to 518.6 million barrels in the week to April 17, which is near all-time record of 535 million barrels set in 2017.
Besides, U.S. West Texas Intermediate futures down by 7.2% to $15.72 a barrel, and Brent crude was fell 1.5% to $21.22 a barrel. On the other hand, Sri Paravaikkarasu, Asia oil head at industry consultant FGE said, “Major fuel-exporting countries are facing difficulties finding homes for their surplus barrels. In Singapore, crude processing rates at refineries have probably dropped to around 60% of capacity and may drop further to as low as 50% during the second quarter.”
WTI Bears Are Quite a Strong May Decline Further
Oil is currently residing near $15.60 area and trying to push lower. The price broke below the dynamic level on the intraday chart. It indicates Oil price fall may continue further in the process.
Image: Oil 4 Hour Chart
According to the 4-hour chart, WTI is currently residing near $15.60 area after Oil price fall below $16. Oil current price action is quite non-volatile and impulsive, which may sustain further lower in the process. So, if the price remains below $16 area and also below the dynamic level, the bears may continue to push the price down towards $9 in the days ahead.
Furthermore, the dynamic level of 20 EMA is currently residing above the price, which may now act as strong resistance to push the price down. Besides, the MACD lines are residing above 0.00 level and may have a bearish cross over. Moreover, the RSI line is currently residing below mid-level 50, which indicates bears may hold the bearish momentum further.
To conclude, after a historical fall, WTI was able to recover higher but failed to sustain above $16 area. A daily impulsive bearish close is required to see that Oil price will fall further or recover higher in the coming days.