WTI oil price eased on Thursday as traders took profit on Wednesday’s strong rally when oil price rose 2.06% in a biggest one-day rally since 18 Apr.
The rally was boosted by report that OPEC will keep production cut until at least the end of the year, improving the sentiment which weakened on concerns about output increase by key world oil producers to cover oil shortages.
Reversal pattern was completed on daily chart after steep fall from $72.89 peak found solid ground on the top of rising daily cloud.
Subsequent bounce cracked pivotal barrier at $68.50 (Fibo 38.2% of $72.89/$65.79 fall), but so far without clear break higher which is required to generate strong bullish signal for extension of recovery rally from $65.79 (28 May low).
Strengthening momentum and north-heading slow stochastic support the notion, but fresh bulls were weakened by build of US crude stocks (API report showed build of 1 million barrels).
Focus turns on release of EIA crude stocks data, due later today and forecasted for build of 2.2 million barrels cs 5.7 million barrels build last week.
Solid numbers from EIA report (releaseat / below forecast) would be supportive for oil prices, while surprise draw in oil inventories would accelerate recovery rally for test of converged 10/30SMA’s at $69.55 and psychological $70 barrier.
Negative signal could be expected on break below rising 55SMA ($67.35) which would risk retest of daily cloud top ($66.61) and 28 May low at $65.79.
Res: 68.26, 68.65, 6955, 70.00
Sup: 67.35, 67.00, 66.61, 66.34
