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Crude Oil Price Reversal Emerges Ahead of April Low


Crude Oil Price Talking Points

The worth of oil consolidates after clearing the opening vary for April, however crude seems to be reversing course forward of the month-to-month low ($92.93) because it extends the collection of upper highs and lows from earlier this week.

Crude Oil Price Reversal Emerges Ahead of April Low

The worth of oil makes an attempt to increase the rebound from the weekly low ($95.28) following a less-than-expected rise in US inventories, and it appears as if present market circumstances will maintain crude costs afloat amid indicators of restricted provide.

Image of DailyFX Economic Calendar for US

Fresh knowledge prints popping out of the US present crude inventories rising for the third time this month, with stockpiles widening 0.692M within the week ending April 22 versus forecasts for a 2M rise. The figures might encourage the Organization of Petroleum Exporting Countries (OPEC) to progressively increase manufacturing because the group plans to “adjust upward the monthly overall production by 0.432 mb/d for the month of May 2022,” and OPEC and its allies might retain the present output schedule at its subsequent 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 estimates and approximately 0.3 mb/d higher than 2019.”

Image of EIA US Weekly Field Production of Crude Oil

Until then, indicators of restricted provide might gasoline the latest collection of upper highs and lows within the worth of oil as a deeper have a look at the replace from the Energy Information Administration (EIA) reveals weekly discipline manufacturing printing at 11,900K for the second week, and crude might push in direction of the month-to-month excessive ($109.20) because it makes an attempt to commerce again above the 50-Day SMA ($102.89).

With that stated, the value of oil might proceed to exhibit a bullish development in 2022 as OPEC retains a gradual method in boosting provide, and crude might try to retrace the decline from the yearly excessive ($130.50) because it seems to be reversing course forward of the month-to-month low ($92.93).

Crude Oil Price Daily Chart

Image of Crude Oil Price Daily Chart

Source: Trading View

  • The worth of oil consolidates after clearing the opening vary for April because it slips under the 50-Day SMA ($102.89) for the second time in April, however the optimistic slope within the transferring common presents a constructive outlook for crude because it seems to be reversing course forward of the month-to-month low ($92.93).
  • The failed makes an attempt to shut under the Fibonacci overlap round $93.50 (61.8% retracement) to $95.30 (23.6% enlargement) might push the value of oil again above the 50-Day SMA ($102.89), with a break/shut above the $104.20 (50% enlargement) space bringing the $108.10 (61.8% enlargement) area again on the radar.
  • A break above the month-to-month excessive ($109.20) opens up the $112.80 (161.8% enlargement) to $113.70 (78.6% enlargement) area, with the following space of curiosity coming in across the $115.00 (23.6% retracement) deal with.
  • Nevertheless, lack of momentum to push again above the 50-Day SMA ($102.89) might push the value of oil again in direction of the $100.20 (38.2% enlargement) area, however want a detailed under the overlap round $93.50 (61.8% retracement) to $95.30 (23.6% enlargement) to open up the $91.60 (100% enlargement) space.

— Written by David Song, Currency Strategist

Follow me on Twitter at @DavidJSong





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