U.S. West Texas Intermediate crude oil futures pierced last week’s multi-year low and Brent crude oil fell below $30 a barrel on Tuesday to its lowest since 2016, as the coronavirus pandemic slowed economic growth and oil demand while Saudi Arabia and Russia continued to engage in their battle for market share, according to Reuters.
Traders are now awaiting the release of the latest weekly inventories report from the American Petroleum Institute (API) at 20:30 GMT. It is expected to show a build of 3.5 million barrels for the week-ending March 10.
Major users like the United States and Canada, along with nations in Europe and Asia, are taking unprecedented steps to contain the virus, including curbing demand for crude and products such as gasoline and jet fuel, by shutting down restaurants, bars, and international air travel.
At 19:40 GMT, May WTI crude oil is trading $27.42, down $1.58 or -5.48%.
Daily Technical Analysis
The main trend is down according to the daily swing chart. The downtrend was reestablished on Tuesday when sellers took out the last swing bottom at $27.83. A trade through $36.70 will change the main trend to up.
The minor range is also down. A trade through $34.38 will change the minor trend to up. This will also shift momentum to the upside.
Guiding May WTI crude oil lower is a steep downtrending Gann angle at $28.82. This angle is moving down $2.00 per day from the March 11 main top at $36.70.
Look for the market to continue to trend lower as long as it remains under this Gann angle. If it continues to follow this angle then look for a test of the 2000 low at $21.37 on March 20 to March 23.
This article was originally posted on FX Empire
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