Thursday's Market Minute: Crude Oil Calms After Climb

Crude Oil futures are taking a breather after yesterday’s EIA report showed a less-than-expected 2.4 million barrel increase in inventories. Although these are somewhat bullish numbers, crude is on pace for its fifth straight red day. A pause at this point doesn’t seem unreasonable given oil’s roughly 80% gain since the end of October, with the /CL contract now establishing a range between 63.75 and 68. The MACD shows weakening bullish momentum with a recent bearish crossover while price action looks to be forming a descending triangle shape sloping downward from the Mar. 8 highs.

It’s also worth noting that crude saw volume significantly below its 50-day moving average during the past four days, as well as four consecutive days of narrow price movement. Like the calm before the storm, low volatility can often be a precursor to high volatility, so watch out for if one of these significant price levels is breached. Other important points to the downside include the Parabolic SAR near 63.14, the 21-day Exponential Moving Average near 62.90, and yearly Linear Regression Line near 58.

Photo by Zbynek Burival on Unsplash