WTI Crude Oil Futures in Limbo as Supply-Side Pressures Meet with Demand Concerns

The OPEC+ recently concluded their monthly meeting with another production cut in the books, which Saudi Arabia has committed to with a 1 Million barrel per day cut. The WTI Crude Oil Futures (NYMEX: CL) found room to wiggle to the upside, but demand concerns capped the upside.  

Overshadowing the output cut was a decline in trade activity in the second-biggest global economy, China. China’s balance of trade fell short of expectations by 28% to $65.8B, driven by a drop in exports of 7.5% and the continued weakening of imports which declined 4.5% for the month. As a major consumer of commodities, the markets feared that the commodity demand was somewhat gloomy, thereby capping the upside gains of a supply-side cut.  

Técnicos 

The WTI Crude Oil Futures have struggled to gain momentum in one direction, leaving the 100-day moving average relatively flat. However, key levels have been printed by the market, which has seen significant reactions.  

The $74.02 per barrel (BLL) level forms a resistance point where supply has often outweighed demand. The most recent attempt by bulls to go beyond the resistance level was met with sharp selling, which took the price down toward the $67.50 BLL level. The market ultimately rejected this level to establish a support level.  

At present, price action is in the hands of optimistic traders that have pushed the price higher from the 61.80% Fibonacci Retracement Golden Ratio at $70.38 BLL. If upside momentum sticks, the WTI Crude Oil Futures could retest the resistance level at $74.02 BLL.  

Bearish traders will likely be lurking at the resistance level. A reversal could play out if a high volume breakout above the $74.02 BLL level is avoided. Bearish traders will likely aim for the $67.50 BLL level as a point of interest.  

Resumen 

The WTI Crude Oil Futures will likely be supported above the $67.50 BLL level as output cuts take effect. The $70.38 BLL level, which forms the Golden Ratio, will probably act as a pivot between sentiment that drives the price towards support or resistance.  

Fuentes: EIA, Reuters, TradingView