US Crude settling following volatile day
Yesterday’s US Crude inventories data provided oil traders with big volatility yesterday. However, the fact that a big drawdown in crude reserves ultimately led to losses was a warning sign that perhaps the selling is not over.
This morning has seen price regain the $38.41 level and is currently utilising it as support. Ultimately, we could see this level being used as a base to project higher, but the overall outlook is one of uncertainty.
Thus it makes sense to await the resolution, where a closed hourly candle above $39.84 is pointing towards a bullish outlook, while a close below $37.70 looks to continue the losses.
Resistance levels of note are $40.28, $40.57 and $41.27, while support levels are $37.70 and $37.63.
Brent trending lower
Brent seems to have more direction than US crude, with a clear downtrend still in play.
Price is currently finding resistance on the 50-hour simple moving average, but the key resistance level of note is $41.75, which a close above would point towards a more bullish outlook.
Until that happens, further losses are likely, with support levels of $40.12 and $39.75 in sight, below which we would have to look at multi-year levels which can have less validity.