Remember that range resistance play that we spotted a couple of days back?
Well, U.S. crude oil (WTI) prices have indeed traded lower!
Recall that WTI crude oil prices dropped from its 80.00 levels as traders priced in higher Fed interest rates and global growth concerns.
WTI Crude Oil (USOIL): 4-hour
Can the bearish momentum send WTI prices to the 73.00 handle?
As you can see, 73.00 marks the bottom of a range support that hasn’t been invalidated since mid-December.
A retest of the 73.00 zone would make it easier for commodity buyers to push WTI higher on a round of risk-taking.
Even Stochastic is ready for a bounce as it hangs out in the oversold area. Moving averages are of no help, though, as they don’t seem to point to a directional movement.
Who’s ready to buy WTI? Before you price in higher oil prices, you should at least re-evaluate bigger economic themes.
For one thing, investors remain worried that the Fed’s hawkish plans would choke economic growth and crude oil demand.
A recent report from API also showed the inventories of U.S. oil jumping by 9.895 million barrels in the week ending Feb 17, far higher than the 1..7 million-barrel increase that markets had priced in.
If traders continue to price in higher interest rates, lower growth, and higher-than-expected inventories, then WTI could drop below 73.00 and retest previous lows closer to the 70.00 mark.
But if risk-taking becomes the name of the game in the next trading sessions, then WTI could be on the radar for many commodity buyers.
