Crude Oil Prices Break 9-Month Uptrend Despite Inventory Drop

Talking Points:

  • Crude oil prices dump to five-week low after pivotal support break
  • Gold prices symbol time, watchful for a FOMC assembly outcome
  • Tone of Fed process statement, EIA register information now in focus

Crude oil prices sank to a lowest turn in 5 weeks, building on a technical relapse remarkable yesterday. The dump began after appetite hulk ConocoPhillips reported first-quarter formula that lifted doubts about a durability efficiency of an OPEC intrigue to cut prolongation and boost prices.

While a association managed a distinction of $0.62 cents per share – a initial certain outcome in dual years – a sum of a news looked ominous. Putting aside a certain grant from divestment of resources in Canada and New Mexico as good as other one-off items, a detriment of $0.02 was recorded.

This fell brief of settle forecasts job for a prosaic outcome once special considerations were taken out of a equation. It also seemed to be interpreted to vigilance of ubiquitous debility in a attention as a whole, implying that cost stabilization given early 2016 was doing small to most urge fundamentals.

Crude was pushed serve downward after Saudi Deputy Crown Prince Mohammed bin Salman pronounced non-oil revenues exceeded expectations in a initial quarter, hinting that a dominion might not be as penetrating to pursue an prolongation of a OPEC supply rebate settle failing mid-year.

The weekly API register upsurge information helped prices redeem from event lows, stating that stockpiles strew 4.16 million barrels final week. The spotlight now turns to central register numbers from a EIA. Prices might scold aloft if a outcome is tighten to API’s guess contra a 2.9 million tub pull expected.

Gold prices noted time, watchful for a FOMC process statement to cranky a wires before creation a subsequent move. A sanguinary tinge notwithstanding negligence US enlargement in a initial entertain might strengthen a odds of a rate travel in in June, promulgation a steel lower. A newly discreet viewpoint might be understanding however.

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GOLD TECHNICAL ANALYSISGold prices paused to connect waste after descending to a three-week low. From here, a daily tighten next a 1235.91-41.50 area (October 7 2016 low, 23.6% Fibonacciexpansion), exposes a plane rhythm indicate during 1218.90. Alternatively, a annulment behind above a 14.6% Fibat 1258.62 targets descending trend line insurgency during 1285.75.

Crude Oil Prices Break 9-Month Uptrend Despite Inventory Drop

Chart combined regulating TradingView

CRUDE OIL TECHNICAL ANALYSISCrude oil prices continued to pull reduce after violation nine-month rising trend support. A daily tighten next a 47.08-69 area (March 22 low, 76.4% Fibonacci expansion) opens a doorway for a plea of a 100% turn during 45.82. Alternatively, a annulment behind above a 61.8% Fib during 48.85 – now recast as insurgency – paves a approach for a retest of a 50% enlargement during 49.78.

Crude Oil Prices Break 9-Month Uptrend Despite Inventory Drop

Chart combined regulating TradingView

— Written by Ilya Spivak, Currency Strategist for DailyFX.com

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