Crude Oil Price Discussion Items
Oil prices consolidated after clearing the opening range for April, but crude oil appears to be reversing direction ahead of its monthly lows ($ 92.93) as it extends a series of higher highs and lows from earlier this week.
Crude Oil Price Reversal Appears Ahead Of April Lows
Oil prices trying to extend the rebound from a weekly low ($ 95.28) following a less -than -expected rise in U.S. inventory, and it appears that current market conditions will keep crude oil prices amid signs of limited supply.
New data prints coming out of the U.S. show crude oil inventories rose for the third time this month, with stocks up 0.692 million in the week ended April 22 compared to forecasts for a 2 million increase. The numbers are probably encouraging Organization of the Petroleum Exporting Countries (OPEC) to increase production gradually as the group plans to “adjust to the overall monthly production of 0.432 mb/d for May 2022, ” and OPEC and its allies may maintain current production schedules in the future Ministerial Meeting on May 5 as the latest Monthly Oil Market Report (MOMR) States that “World oil demand is projected to average 100.5 mb/d, which is 0.4 mb/d lower than the previous month’s estimate and about 0.3 mb/d higher than 2019. ”
Until later, signs of limited supply may drive a series of recent highs and lows of oil prices as a deeper look at an update from the Energy Information Administration (EIA) shows weekly field production printing at 11,900K for the second week, and crude oil may push toward a monthly high ($ 109.20) as it tries to trade back above the 50 Day SMA ($ 102.89).
Thus, oil prices are likely to continue to show an upward trend in 2022 as OPEC maintains a gradual approach in increasing supply, and crude oil may try to retrace the decline from annual highs ($ 130.50) because it seems to be reversing ahead of monthly lows ($ 92.93).
Crude Oil Price Daily Chart
Source: Trade Outlook
- Oil prices strengthened after crossing the opening range for April as it slipped below the 50-Day SMA ($ 102.89) for the second time in April, but a positive slope in the moving average offers a constructive outlook for crude oil as it looks like reversing the course ahead monthly lowest ($ 92.93).
- A failed attempt to close below Fibonacci overlapped around $ 93.50 (61.8% shift) to $ 95.30 (23.6% expansion) can push oil prices back above levels 50 Day High School ($ 102.89)with a break/close on top $ 104.20 (50% expansion) area bring $ 108.10 (61.8% expansion) is back on the radar.
- Rest on top monthly high ($ 109.20) open $ 112.80 (161.8% expansion) to $ 113.70 (78.6% expansion) territory, with the next area of interest to come around $ 115.00 (23.6%reversal) control.
- Still, there is a lack of momentum to push upwards 50 Day High School ($ 102.89) can push oil prices back in that direction $ 100.20 (38.2% development) areabut needs a cover below overlapped around $ 93.50 (61.8% shift) to $ 95.30 (23.6% expansion) to open an area of $ 91.60 (100% expansion).
— Written by David Song, Currency Strategist
Follow me on Twitter at @DavidJSong