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9 May 2024 | FXGT.com

WTI Climbs Above $79 Following Inventory Decline

  • Current Price Dynamics: West Texas Intermediate crude oil prices rebounded above $79 per barrel on Thursday, following a significant decrease in U.S. crude inventories. Oil prices have faced significant pressure since dropping below $85 in April, experiencing a decline of more than 10% over the past month.
  • Inventory Impact: A sharp drop in U.S. crude stockpiles last week—1.4 million barrels to 459.5 million barrels, exceeding the forecasted 1.1-million-barrel reduction—hints at an increase in demand.
  • Technical Indicators: Despite the overall structured downtrend and prices trading below key daily moving averages, the market has shown signs of support above the 200-day exponential moving average (EMA), with a recent low at $76.90.
  • Short term Bullish Reversal: The previous trading day marked a bullish candlestick formation on the daily timeframe, accompanied by a bullish reversal on lower timeframes.
  • Bullish Momentum: The market is gearing up to test the psychological resistance level at $80. Although the daily trend remains strongly bearish while below $82, momentum indicators since yesterday’s close have shown a bullish shift, suggesting potential for a further upward correction.
  • Key Resistance: A break above $80 could lead to a retest of the $82 level, which aligns with the 45 EMA channel on the daily chart, testing the resolve of the daily downtrend.
  • Intraday Support: Intraday support is established at $78.50, with short-term momentum appearing bullish while price remains above this threshold. The critical support level for the downtrend is outlined at yesterday’s low of $77.50, which aligns with the 200-day Exponential Moving Average channel. A breach below this level could trigger further declines. Conversely, revisiting these lows will be pivotal in assessing the strength of this support zone.

US Oil 4 Hour Chart

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