- WTI receives some continuation sales for the second day in a row on Thursday.
- An unexpected surge in US stocks turns out to be a key factor motivating profit-taking.
The crude WTI is extending the retracement drop of the previous day, from the highest level since November 2014 around $ 79.80, and witness some continuation sales for the second day in a row on Thursday. The downward movement has dragged spot prices to three-day lows, around the region of $ 75.00 at the start of the European session. At the time of writing, WTI rebounds rapidly to the $ 75.78 region, still losing -1.23% on the day.
The previous day’s corrective pullback followed a unexpected increase in crude stocks in the United States That raised concerns about demand after the recent runaway rally to multi-year highs. The US Department of Energy reported Wednesday that US crude inventories rose by 2.3 million barrels last week against expectations of a modest 418,000 barrel drop.
Aside from this, comments from US Secretary of Energy Jennifer Granholm further contributed to the decline in current raw material earnings. Speaking to the Financial Times, Granholm spoke about the possibility that the United States could combat higher prices by releasing oil from strategic reserves or potentially halting crude exports.
Despite the negative factors, the fall in oil prices, so far, has been modest in the wake of OPEC + decision earlier this week to keep a cap on crude supplies. OPEC + was concerned that a fourth global wave of COVID-19 infections could hit the recovery in demand, opting to stick with the plan to increase production gradually, ignoring international requests to boost production.
Therefore, it will be prudent to wait for a strong continuation sell before confirming that the WTI rally is over and positioning yourself for any further losses.
WTI technical levels
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