WTI Crude Futures: Downside Correction

WTI Crude Futures have dropped about 8% so far in September with increased volatility compared with the last two months...

Energy 1

WTI Crude Futures (November contract) have dropped about 8% so far in September with increased volatility compared with the last two months. Optimism on a speedy recovery in the global economy has eased, while weakness in the stock markets and a rebound in U.S. dollar have also put pressure on the oil prices.

Meanwhile, the American Petroleum Institute (API) reported that U.S. crude-oil inventories rose 691,000 barrels in the week ending September 18 (-2.26 million barrels expected). Later today, the U.S. Energy Information Administration (EIA) will release official crude oil inventories data for the same period.

From a technical point of view, WTI Crude Futures (November contract) flags downside risks as shown on the daily chart. It has broken below a bearish rising wedge pattern, while the 20-day moving average has crossed below the 50-day one. The level at $41.70 may be considered as the nearest resistance, while the 1st and 2nd support are expected to be located at $36.55 and $33.50.

Source: Gain Capital, TradingView

Build your confidence risk free

More from WTI

Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.