Yahoo Finanza Crude Oil Price Update – COVID-19 Demand Issues Continue to Cap Gains
U.S. West Texas Intermediate crude oil futures finished higher on Friday just one day after a plunge nearly erased all of the month’s gains. That move ensured a lower close for the week. Prices were boosted on Friday by the news that U.S. oil output cuts in May were the largest on record.
On Friday September WTI crude oil settled at $40.43, up $0.51 or +1.28%.
U.S. crude oil production plummeted in May, falling a record 2 million barrels per day to 10 million bpd, the U.S. Energy Information Administration (EIA) said in a monthly report on Friday.
In related news, Chevron Corp reported an $8.3 billion loss on asset write-downs and ExxonMobil Corp recorded a second consecutive quarterly loss.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. The trend turned down on Thursday when sellers took out three main bottoms at $40.48, $39.97 and $38.77 before stopping at $38.72.
A trade through $38.72 will signal a resumption of the downtrend, while a move through $41.93 will change the main trend to up.
On the upside, the major resistance is a long-term 50% level at $41.72.
On the downside, retracement zone support comes in at $39.92 to $39.30.
The new minor range is $41.93 to $38.72. Its 50% level at $40.32 acted like minor resistance on Friday. It could control the direction of the trade on Monday.
Short-Term Outlook
The news writers said that the market was supported by some bullish data from May. Obviously it is stale news. If you followed the Baker Hughes numbers released each Friday, you would’ve seen a drop in the number of producing oil rigs. This means production was going down. No surprise there.
Prices are likely to remain in a range, but with a bias to the downside as long as the number of coronavirus cases continues to rise. This is because of its impact on demand. However, as long as OPEC+ continues to trim production, the supply side shouldn’t get out of control.
From a technical perspective, unless a vaccine is developed over the near-term, buyers are going to have a hard time overcoming the major resistance at $41.72.
Meanwhile, a sustained move under $39.30 could trigger an acceleration to the downside. The daily chart shows $36.96 to $35.83 is a potential downside target. This may actually be good because this zone represents value so a test of this area is likely to attract new buyers.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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