WTI extends its losses and approaches $82.00 due to the increase in oil reserves and lower demand

  • Oil prices accelerate their reversal as US reserves increase more than expected
  • Prospects for higher rates for longer raise concerns about lower oil demand
  • These fears have offset the impact of geopolitical risks.

Oil prices are experiencing a sharp reversal on Wednesday, to trim some of the gains made over the past three months. WTI crude oil futures plunged on Wednesday after a period of hesitation sparked by the Fed's bullish outlook and larger-than-expected U.S. oil stockpiles.

The EIA weekly report revealed that US oil inventories increased by 2.735 million barrels. in the week of April 12, compared to expectations of 1.65 million, and from 5.841 million barrels the previous week.

This increase in crude oil stocks comes after Fed Chairman Jerome Powell warned that the entity could still have work to do to bring inflation to the 2% target. These comments suggest that interest rates will remain at restrictive levels for longer, which is expected to depress economic growth and dampen oil demand.

This has offset the positive impact on crude oil from rising geopolitical risks and news reports of a US threat to reimpose the ban on Venezuelan oil if President Maduro does not fulfill his commitment to hold fair elections this year.

The overall trend remains bullish, although today's bearish reaction suggests a deeper correction. A confirmation below previous highs at $82.85 puts the $80.50 area in bears' sights. To the upside, the bulls should reclaim the $84.90 level to refocus on the yearly high at $87.60.

WTI US OIL

Overview
Latest price today 82.43
Today Daily change -2.35
Today's daily change -2.77
Today's daily opening 84.78
Trends
daily SMA20 83.76
50 daily SMA 80.2
SMA100 daily 76.76
SMA200 Journal 79.5
Levels
Previous daily high 85.67
Previous daily low 84.24
Previous weekly high 87.03
Previous weekly low 84.01
Previous Monthly High 83.05
Previous monthly low 76.5
Daily Fibonacci 38.2 84.79
Fibonacci 61.8% daily 85.12
Daily Pivot Point S1 84.12
Daily Pivot Point S2 83.47
Daily Pivot Point S3 82.7
Daily Pivot Point R1 85.55
Daily Pivot Point R2 86.32
Daily Pivot Point R3 86.97

Source: Fx Street

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