WTI Crude Oil Futures (Short Term): Bullish Bias Remains

Oil prices retreated as caution grew about continued momentum of the economic recovery. U.S. WTI crude oil futures (August) settled 3.1% lower at $39.62 a barrel.

Energy 15

Oil prices retreated as caution grew about continued momentum of the economic recovery. U.S. WTI crude oil futures (August) settled 3.1% lower at $39.62 a barrel.

Investors began to doubt smooth reopening from the coronavirus shutdowns. As new infections per day in the U.S. spike to more than 50,000, state governors are slowing the return to business.

On Wednesday, the Energy Information Administration reported a build of 5.7 million barrels in crude-oil stockpiles last week, in contrast to expectations of a reduction of 3.1 million barrels. In below charts, it shows that the recent change of oil stockpile is fluctuating. As the trend is unclear, investors would not be optimistic on the growth of oil demand.


Source: Trading Economic

From a technical point of view, WTI Crude Oil futures remain trading within the range between $41.60 and $34.00. The 20-day moving average is flattening, while RSI forms a declining trend line. Those indicators suggest the loss of upward momentum.

However, the prices are still supported by a rising channel. Besides, the series of higher tops and higher bottoms pattern remains intact. Those evidence would support the bullish outlook.

The technical outlook remains bullish, but the momentum is being weaker. Therefore, investors should focus on the breakout signal for rebuilding the momentum.

A break above the upper consolidation zone at $41.60 could consider a rise to $43.30 (the low of March 2) and $48.50 (the high of March 3).

In an alternative scenario, a break below $34.00 would indicate a bearish reversal signal and bring a return to $30.90 (the low of May 22).


Source: GAIN Capital, TradingView

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.