U.S. West Texas Intermediate and international-benchmark Brent crude oil futures remained in the grip of bears last week after Energy Information Administration data showed commercial U.S. crude inventories rose by 4.7 million barrels in the week ended May 17, to 476.8 million barrels. As per the Energy Information Administration (EIA) weekly inventories report, U.S. crude stockpiles jumped to their highest levels since July 2017. The greenback government reported that the production of black gold jumped by 100,000 barrels per day (bpd) to 12.2 million bpd. The short positions placed by the potential traders due to stock piles in Crude Inventories was enough to drag the black gold below 200 days Simple Moving Average. On May 26, the OPEC club came as a rescue for the crude oil prices with supply cut, which has acted as a catalyst that has triggered the crude rally this year. But the concerns of lower demand due to Sino-U.S. tariff war outperformed the production curbs of OPEC group and sellers hit the crude market.
After incorporating the Three weeks and Five Weeks Exponential Time –Series Forecasting in the previous 11 weeks crude oil inventories data reported by Energy Information Administration, we are expecting that resulted stockpiles of crude oil could increase either by 3.789 million per barrels and 3.0902 million per barrels respectively. In order to filter the time period, we have employed a Root Mean Square Error method (RMSE), which is pointing out for Five Weeks Exponential Time Series Forecast, according to which, the Crude Oil Inventories is expected to surge by 3.0902 million per barrels making it a total stock piles of 479.8902 million per barrel in reserves of U.S. government.
Daily Technical Forecast
Fire-crackers are expected in today’s session as the slippage of the crude prices below 200 days Exponential Moving Average will not curb easily. As the crude oil has remain in the grip of bears it has been bounced back a little after forming a ‘Bullish Divergence’ as the occurs when prices trace a bottom, rally, and then sink to a new low but MACD-Histogram traces a different pattern on 4-hour scale. While the crude prices has been surged to 59.13 levels but a crossover above 200 moving average won’t be an easy cake so an the traders should make short positions if they find the black gold prices near 200 moving average on any time-frame.
Weekly Technical Forecast
In coming week, we are expecting a blood bath in this counter as the slippage of the black gold below the psychological level of 57 could invite more sellers in the counter and the crude prices could hit to the level of 52.91 as per 2.618% of Fibonacci Extension. As the prices have slipped below 200 days Simple Moving Average, bears turned out stronger. MACD has given a fine bearish crossover and showing no signs of oversold while Commodity Channel Index is hinting for more downside.