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Crude oil continues to move sideways after Tuesday’s failed attempt to push higher.
Yesterday was an important FOMC release day, but the markets didn’t react significantly. The crude oil contract closed just 0.24% higher, extending its short-term consolidation after Tuesday’s pullback. Prices have essentially continued moving sideways following declines in January and February.
Today, oil prices remain flat, up just 0.1%. The market continues to trade within a consolidation, with key resistance around $68.
Oil: Still Fluctuating Along $68
Quoting last Wednesday’s analysis, “The daily chart of crude oil futures is still showing a clear downtrend that began with the January 15 local high of $79.39. However, the decline appears to be pausing near last September’s lows, which could be a positive sign for oil bulls.”
Inventories: Larger Than Expected
The Crude Oil Inventories report, released yesterday, showed a build of 1.7 million barrels – higher than the expected 0.8 million. This helped keep the market near the $66 level.
Conclusion
Crude oil attempted to break above recent local highs on Tuesday but failed, pulling back below $68. Yesterday, it continued to move sideways despite the typically volatile FOMC interest rate decision.
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:
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Crude oil remains in a short-term consolidation.
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In my opinion, the short-term outlook is neutral, and no speculative positions are justified from the risk/reward point of view.
Related: Is Crude Oil Forming a Bottom Near Its Local Lows From Last Year?