WTI crude oil futures continue to remain waterlogged. Or, perhaps that should be oil logged. It’s not hard to see why, when we consider the daily chart from a purely technical and volume price analysis perspective.
First, the resistance level just below $64 per barrel held firm on Monday, which was a weak up day on low volume. This signals the lack of buying interest, which is a key feature of the current volume profile. This was followed by volatile price action on Tuesday on high volume. The price finally closed with a bearish tone. Wednesday picked up this sentiment, delivering a down candle on high volume, confirming the weakness in the market. Then, Thursday and Friday confirmed the lack of interest. However, note the spread of the candles, which are narrow. Yet, the volume is relatively high. In other words, the buyers are finding it hard to move prices higher, with each wave intraday being hit with selling, thereby containing the price action to a narrow range. In early trading, at the start of the week, we are moving back to the volume point of control at $61 per barrel. As such we can expect to see further congestion at this level and perhaps a move back to $58 per barrel in due course.
The overarching fundamental sentiment is one of weakness with a lack of demand whatever OPEC may do in terms of targets and management of supply.The current picture looks set to dominate for a while as the world continues to reels from the reverberations of COVID.