The WTI crude oil price for the June 2020 contract is down 25.03% on the day in a renewed selling onslaught this Monday. Weak demand as a result of the coronavirus pandemic and global storage glut continues to pressurize crude oil price on the WTI and other crude oil benchmarks. Reports indicating that barges are now being used as temporary storage facilities as conventional storage facilities all over the world are at full capacity due to failed utilization.
A Reuters report over the weekend quoted Angolan energy minister Diamantino Azervedo as saying that the 10 million barrels production output cut by OPEC + was insufficient and that further urgent action was needed. The report also quotes Azervedo as adding that “because of lack of storage capacity, continued production is becoming unjustified.” Angola is a member of OPEC.
West Texas Intermediate crude oil price is just barely holding on to the $13 price mark and was trading at 13.01 as at the time of writing.
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WTI Crude Oil Price Technical Outlook
A look at the hourly chart shows that the WTI crude oil price action has been rejected three times at the 200-SMA line, which is acting as dynamic resistance to crude oil price uptick. This significant rejection has provided the impetus for a renewed selloff as sellers re-entered the fray following the 3-day rally from last week’s price collapse and the expiration of the May 2020 contract. The evolving candlestick pattern on the daily chart is that of the falling three methods. A close of today’s candle below the low of the 1st of the three bullish candles within the pattern could signal further bearish moves for crude oil. Such a move would open the door for a test of the June 1998 lows at 10.60. Below this level, 10.42 (March 1986 lows) could come into focus.
On the flip side, a bounce of 10.60 could provide hope of a transient recovery towards 17.36 (Nov 2001 lows). A possibility of an extension of the bounce towards the 18 March and 1 April lows at 19.75 also exists.
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