WTI Crude Oil Slips To $25.30 – Increase in US Inventories Weighs
Today in the Asian trading session, WTI crude oil prices dropped to $25.30, mainly due to the price-positive API data, which showed a rise in US crude inventories. Additionally, tensions about a potential second wave of coronavirus cases after countries started to ease lockdowns also keeps oil prices under pressure. Moreover, China’s war with the US and Australia also weighed down on the oil market. At this moment, WTI crude oil is currently trading at 25.36 and consolidating in the range between 25.07 and 25.79.
At the data front, the weekly release of private inventory data from the American Petroleum Institute (API) revealed a build of 7.64 million barrels against the previous addition of 8.44 million barrels into the stockpiles.
The reason for recent support in the oil prices could be attributed to the further call by Saudi Arabia for larger production cuts to balance the market caused by virus-induced demand destruction. The recent optimism surrounding reopening of major economies is also supporting oil prices.
On the other hand, the United States began once again to report the new cases of coronavirus after easing lockdown restrictions and reopening non-essential businesses in US states, as per the former FDA Commissioner Dr. Scott Gottlieb. Whereas, China and South Korea are also struggling to control second wave outbreaks that spread during the weekend, with South Korea reporting 26 new cases on May 12. As a result, the oil demand could face further crisis ahead.
Pivot Point 25.41
US oil is trading at 26.04 within a symmetric triangle pattern which is providing tripe top resistance at 26.70 along with support at 25.10 and 24.10. While bullish breakout of 26.70 may lead WTI prices towards 27.30. Good luck!