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* Surprise Draw: The price of the US crude benchmark WTI, has regain some ground and rebound from losses following an unexpected drop in U.S crude storage. According to the Energy Information Administration (EIA) report on Wednesday, crude inventories for the week ending May 3 fell by 1.4 million barrels to 459.5 million barrels, compared to the previous week’s build of 7.3 million barrels. Market expectations aligned with a projected decrease of 1.4 million barrels. Additionally, rising speculation of a year-end interest rate cut by the U.S. central bank, fueled by weaker-than-anticipated U.S. jobs data, has also propelled oil prices. Lower interest rates tend to stimulate spending on crude oil.
* Technical Breakout: Crude oil price was traded higher following prior rebound from the support level 77.90. MACD which illustrate ongoing bullish momentum signal suggest the commodity to further extend its gains.
* Resistance and Targets: If the bullish momentum persists, there’s a strong likelihood that the price will potentially head towards 80.80. Conversely, a potential correction is also to be expected and the price could head back towards the level 77.90
Understand how technical analysis can help you in this trading opportunity.
Moving ahead, attention will shift towards forthcoming trade figures from China to gauge demand in the world’s largest crude importer. Traders are concerned that any further weakness in the Chinese economy could dampen its appetite for crude. Meanwhile, focus also remains on the possibility of a ceasefire between Israel and Hamas, particularly as the U.S. intensifies efforts to broker an agreement. The Biden Administration has halted weapon shipments to Israel in response to its actions in Rafah.
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Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.
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