WTI crude oil price traded higher in yesterday’s trading after the US crude oil inventories showed a lesser-than-expected build. As of this writing, the commodity is up by over $1.50 from its opening price as it trades at $13.37.
According to the Energy Information Administration, crude oil inventories in the US last week were only at 9 million barrels. This was smaller than the forecast at 11.2 million barrels and was then bullish for the commodity. This is because the oversupply in oil was not as bad as investors anticipated.
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WTI Crude Oil Price Outlook
On the daily time frame, it can be seen that WTI crude oil price CFDs seems to have found support around $7.00. In fact, a closer look at the commodity would show a double bottom chart pattern. Considered as a bullish reversal indicator, this chart pattern is characterized by a market bottoming out at a price level twice. What this suggests is that WTI crude oil price could soon trade higher if the commodity successfully closes above neckline resistance around $12.75. Should this happen, near-term resistance is at $16.15 where the falling trend line (from connecting the highs of February 20, March 4, and April 9) coincides with the 50% Fib level (drawing from the high of April 3 to the low of April 21).
On the contrary, a close below the low of April 28 at $5.73 would invalidate the bullish chart pattern. It could suggest more downside potential for WTI crude oil price which could possibly push the commodity to its April 21 lows at $3.42.
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