Crude oil price is now approaching 54.60 for the WTI blend as the US Energy Information Administration (EIA) on Wednesday revealed that US crude oil stocks jumped by 5.7 million barrels last week. This was a lot higher than what analysts had estimated; a buildup of 500,000 barrels.
As a result WTI crude oil is down nearly $1 on the day, falling from intraday highs of 55.40 to lows of 54.45. The price drop takes WTI crude back to the horizontal support formed by the 23.6% Fibonacci retracement line on the daily chart. This area is also the site of the neckline of the previous double bottom of June 2019.
Crude oil price pattern on the chart is that of a bearish flag, with price candles back within the consolidation channel that forms the flag. The next trigger for crude oil prices could be the FOMC rate decision.
A drop below 54.45 targets the next support at 52.28 in the first instance. An upside reprieve for prices brought on by risk-on sentiment sends prices back to 55.73 or the 38.2% Fibonacci level of 56.65.Download our latest quarterly market outlookfor our longer-term trade ideas.
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