WTI oil fell below $ 64 per barrel and hit one-week low on Wednesday, after the report from the US Energy Information Administration showed another increase in weekly crude stocks.
US crude inventories rose by 2.4 million barrels in the week ending March 12 and generated fresh negative signal although last week’s figure fell below forecasted 3 million barrels rise and previous week’s 13.8 million barrels build.
Fresh increase comes after more oil facilities came back online following closure due to devastating storms in Texas last month.
Renewed concerns about extended lockdowns in a number of countries following the third wave of coronavirus, which threaten to further hurt economic activities and negatively impact demand recovery, weigh on near-term price action.
Larger bull-leg from $ 33.61 (Nov 2 trough) is currently on hold and consolidating under new recovery high at $ 67.95 (Mar 8 peak, the highest since Oct 2018), as traders collected some profits and overbought weekly studies signaled a pause ahead of attack at psychological $ 70 barrier.
Fresh bears pressure pivotal supports at $ 63.11/02 (Mar 10 low / 20DMA) violation of which would risk deeper pullback and expose round-figure support at $ 60 and a higher base at $ 59.00 zone.
Today’s close below 10DMA ($ 64.85) which kept the downside protected in past two weeks, would add to negative signals, while failure to do so would keep near-term consolidation within limited range and near-term focus shifted to the upside.
Res: 64.85; 65.31; 66.38; 67.44
Sup: 63.66; 63.11; 63.02; 61.62