West Texas Intermediate US crude oil futures reached 12% earlier in the session, according to reports that Saudi Arabia and Russia had reached a deal on a deep drop. production, according to Reuters, which cited two sources, and that the cuts could be expected to be up to 20 million barrels per day.
However, these gains could not be sustained because traders were awaiting confirmation of the agreement as well as key details, such as how the discounts would be divided, as well as the duration of their implementation.
At 4:20 p.m. GMT, May’s WTI crude oil trades $ 26.10, up $ 1.01 or + 4.03%. This is down from an intraday high of $ 28.36.
Daily technical analysis
The main trend is upward according to the daily swing chart, however, prices have stagnated for four sessions as traders awaited the outcome of the OPEC + videoconference scheduled for Sunday.
A trade of $ 29.13 will signal a resumption of the uptrend. The main trend will change down on a trade across the last main trough at $ 19.27.
The main range is from $ 36.70 to $ 19.27. Its retracement zone at $ 27.99 to $ 30.04 is resistance. This zone stopped buying at $ 29.13 on April 3 and even earlier today at $ 28.36. Obviously, this area controls the short term direction of the market.
The short-term range is from $ 19.27 to $ 29.13. Its retracement area is from $ 24.20 to $ 23.04. He supported Tuesday and Wednesday.
Daily technical forecast
Based on the anticipated price action and the current price at $ 26.10, the direction of the May WTI crude oil market for the remainder of the session on Thursday will likely be determined by the reaction of traders to the bearish angle of Gann at $ 26.20.
A sustained movement of more than $ 26.20 will indicate the presence of buyers. Overcoming Gann’s bullish angle at $ 27.27 will indicate that the purchase is getting stronger.
Crossing the strong side of the 50% level at $ 27.99 will indicate that the purchase is getting stronger. This could trigger an acceleration to $ 29.13, followed by the main Fibonacci level at $ 30.04.
In order to show real strength, the purchase will have to be strong enough to close above $ 30.04 today.
A steady movement under $ 26.20 will signal the presence of sellers. This could trigger a late session break at $ 24.20. With the main trend going up, buyers could try to restore support to this level later in the session.
Basically, the main resistance is from $ 27.99 to $ 30.04 and the major support is from $ 24.20 to $ 23.04.
Even if there is an agreement, the gains will likely be limited due to the destruction of demand caused by the impact of the coronavirus.