Crude Oil Outlook: Oil Prices Slump as API Inventories Rise Ahead of OPEC+
Oil Talking Points
- Crude oil prices slump as investors eye OPEC+ and FOMC
- US Crude (WTI) falls below trendline support of the rising channel
- Battle between climate change and the energy crisis may further assist in the catalyzation of oil prices for the imminent move
Over the past few weeks, oil prices have continued to proceed along a upward trajectory as the energy crisis remains a key concern for global central banks.
Following the release of the American Petroleum Institute (API) report yesterday, an influx of sellers have managed to force prices lower after the report indicated that production had increased by approximately 2 million barrels above expectations.
With the FOMC and the OPEC+ (Organization of the Petroleum Exporting Countries and its allies) report expected to be released over the next two days, both fundamentals and technical factors may further assist in the catalyzation of price action for the imminent move.
Oil – US Crude (WTI) Price Action
After pricing in the fundamental factors which remain at the forefront of risk sentiment, oil prices may likely continue to retrace a portion of their recent gains if OPEC+ agrees to increase output above the expected 400,000 barrels.
However, on the daily chart below, US crude (WTI) oil has broken below trendline support of the rising channel, providing bears the opportunity to temporarily drive prices back towards the key psychological level of $80.00 per barrel.
US Crude Oil (WTI) Daily Chart
Chart prepared by Tammy Da Costa using TradingView
While key Fibonacci levels will likely assist in guiding price action in the foreseeable future, the rising channel will likely continue to provide resistance for the short-term move with the key levels of support and resistance currently remaining between the $80 and $85.00 handle, at least for now.
--- Written by Tammy Da Costa, Analyst for DailyFX.com
Contact and follow Tammy on Twitter: @Tams707
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.