U.S. crude oil price trades higher today amid growing optimism as the businesses reopening in many countries and analysts expect the crude oil demand to recover, as the cars start again to move in the streets. The consumption by U.S. car drivers is accounting for almost 10 of global oil supply. The crude oil price has gained over 150% since April 28 but still is 57% lower in 2020. Crude oil demand has collapsed amid the coronavirus crisis restrictions and a price war between Russia and Saudi Arabia.
Energy Information Administration (EIA) reported yesterday that U.S. crude inventories rose for the 15th straight week, rising by 4.6 million barrels. Market consensus was for a 7.8 million barrel rise. The distillate inventories also rose sharply.
Production cuts by crude oil producers in the USA and an agreement to cut output by OPEC+ on May 1 are also helping oil prices, to recover from historic low levels in April after the extreme sell-off amid the coronavirus crisis and the shortage in storage facilities that traders faced ahead of the expiration of the May futures contract.
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WTI Crude Oil Price Analysis
The WTI crude oil price is 7.13% higher at $25.69 recovering yesterday’s losses, and breaking above the 50-day MA for the first time since January 13. The short term picture has improved for the crude oil now, but the sentiment remains fragile due to slow demand and storage facilities shortage ahead of the June expiration futures contract. The long term outlook remains bearish for the crude oil price as long as the price hovers below the 100-day moving average.
On the upside, WTI crude oil price minor resistance stands at $26.74 the daily top. If the crude oil price breaks above, the next resistance will be met at $29.23 the high from April 3 trading session. Next supply zone stands at $33.23 the high from March 16.
On the flip side, the first support for Light crude oil price is at $23.41 the daily low. Next support will be met at $21.24 the low from May 5. The next support stands at $15.84 the low from April 30.
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