The number of barrels rolled back is the biggest in history and had the intention of providing support to crude oil price. However, there are two factors currently weighing down the commodity. First, the spread of the coronavirus has shown no signs of stopping yet. This means that most people will continue to be stuck in their homes in the foreseeable future which implies that demand will be muted. Second, oil producers are running out of space to store oil. There are speculations that oil companies may soon halt production simply because of space.
On the 1-hour time frame of WTI crude oil price CFDs, it can be seen that the commodity is trading within a descending channel. This is characterized by the market making lower highs and lower lows. If sellers continue to dominate trading, crude oil price could soon tap new multi-decade lows below $15.00 where the bottom of the channel is. On the other hand, a close above today’s high at $18.66 could invalidate the descending channel. It could suggest that crude oil price may be on its way to near-term resistance at $20.20 where the highs of April 16 coincide with the 100 SMA.