Crude oil continues to move sideways ahead of the inventory data - is it forming a bottom?
Crude oil futures contracts closed 0.33% higher on Tuesday, continuing their consolidation around the $66 level. The market remains in a sideways pattern following recent declines and a breakdown below the October-December lows.
Today, oil prices are up 1.5%, moving higher yet still within their recent range. While this appears to be a consolidation within a downtrend, the market may still be in the process of forming a bottom.
Investors are awaiting the Crude Oil Inventories report, scheduled for release at 10:30 a.m. The data is expected at 2.1 million barrels, down from the previous reading of 3.6 million.
Conclusion
Crude oil is extending its consolidation following a recent pullback. The market rebounded yesterday and is trading higher today ahead of the inventory data.
Is this a good time to open a short position? I don't think so - the market is approaching strong medium-term support levels and could move sideways or rebound.
For now, my short-term outlook is neutral.
Here’s the breakdown:
- Crude oil continues to consolidate after recent declines.
- In my opinion, the short-term outlook is neutral.
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Thank you.
Paul Rejczak,
Stock Trading Strategist