Oil price negative for the first time since futures trading started in 1982. Oil price historical drop at minus $37.63 level, what next? What are the charts and technical indicators are saying? Read more to find further insights into today’s WTI Technical Analysis.
April 21, 2020 | AtoZ Markets - Oil is currently trading around $21.87 area after a massive drop on the minus figure. WTI price has experienced the most devastating day in the history of the global Oil industry. Moreover, WTI moved up after the huge losses to $21.87 during the New York session yesterday. Besides, Brent Oil could not hold onto earlier gains and dropped 0.89% to $25.73 by 2:51 AM GMT. Oil price historical drop shows how COVID-19 destroys the whole Oil industries just under two months. Moreover, the OPEC+ deal earlier in April to cut Oil output by almost 10 million barrels per day may not be enough to make up for the loss.
Oil Price Historical Drop Shows How Coronavirus Harm the Oil Industry
WTI has taken hit from both Coronavirus and Oil price war between Saudi Arabia and Russia. A difference of opinion between OPEC and its allies on Oil production levels in March caused a significant sell-off in WTI Crude. Moreover, restrictions on traveling and stay at home orders have evacuated ongoing demand for Oil.
Furthermore, RBN Energy CEO Rusty Braziel stated, "The coronavirus pandemic is weighing more on the oil market than the price dispute between OPEC and its allies." He also added, "I would say that, just off the top of my head, 15% of this is Saudi Arabia & Russia and 85% of it is COVID-19. Moreover, the entire world is long on crude oil and the entire world is short on storage capacity. That means the longer that COVID-19 lasts and supply levels don’t match demand, and it means that storage capacity continues to fill up."
On the other hand, U.S. President Donald Trump said, "The problem is no one is driving a car anywhere in the world, essentially. Factories are closed, businesses are closed. We had really a lot of energy to start off with, oil in particular, and then all of a sudden they lost 40%, 50% of their market."
He also added, "OPEC+ have to do more by the market, it's the same thing over here. If the market is the way it is, people are going to slow it down, or they're going to stop. That's going to be automatic, and that is happening."
Can WTI Price Recover Higher in the Coming Days?
Image: Oil Daily Chart
According to the Daily chart, WTI is currently residing near $21.87 area after Oil's historical price drop. The price dropped sharply from $20 area to minus $37.63 just in one trading session. Moreover, the WTI price recovered almost 7.05% during the Asian session. As per the current price action context, if the price can break above $28 area with a daily impulsive close, Oil price may recover further towards $36 area in the days ahead.
Furthermore, the dynamic level of 20 EMA is currently residing above the price, along with the Kijun line and Tenkan line. The dynamic level of 20 EMA may pull the price higher as Mean Reversion, and Kijun line and Tenkan line may work as a confluence of the dynamic level of 20 EMA. Moreover, the MACD lines are residing far below from 0.00 level and may have a bullish intersection. It indicates that further bullish pressure can be seen in the coming days.
To conclude, Oil price historical drop shocked investors around the world. This drop shows how COVID-19 pandemic destroyed the total Oil industry, which also pushed the world into recession. In this situation, it will be difficult to predict how the Oil market will react further in the coming days. As long as the Coronavirus pandemic problem remains unsolved, we may see further volatility in the market.