U.S. West Texas Intermediate and international-benchmark Brent crude oil futures remained in a narrow range of 3,555-3,803 as pressure from OPEC and its allies to extend the cut in supply of crude oil to curb the falling prices managed to counterpoise the spike in stockpiles of U.S. Commercial crude oil inventories and fear of slowdown due to tariff war. As per the U.S. Energy Information Administration, U.S. commercial crude inventories jumped by 6.8 million barrels in week-ending May 31 making it a total of 483.29 million barrels while Reuters polls were expecting to shed by 0.8 million barrels. The greenback government reported that the U.S. crude imports surged by over 1 million barrels per day. The week had been a roller-coaster ride as the black gold bounced back in early days of the previous week after forming a ‘Bullish Divergence’ on hourly chart but failed to sustain longer as General Administration of Customs reported China’s crude imports fall to 40.23 million tonnes or 11% in May from 43.73 million tonnes reported in April and formed an ‘Island Cluster’ on daily scale that pushed the black gold prices lower.
API and Reuters Forecast:
As per the weekly American petroleum Institute (API) storage report a rose by 4.85 million barrels last week to 488.06 million is reported by them that might hammer more on black gold prices
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 3.730 million per barrels and 2.531 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 Three Weeks Exponential Time Series Forecast, according to which, the Crude Oil Inventories is expected to surge by 3.730 million per barrels making it a total stock piles of 487.020 million per barrel in reserves of U.S. government.
Daily Technical Forecast
The lack of fresh fundamental developments from OPEC and allies could put investors on sidelines as the thrust of global slowdown is pushing black gold prices lower. On hourly scale, the black gold has formed an ‘Island Cluster’ gap pattern that signals for reversal of a trend. The counter is trading below 200 hours Simple Moving Average that indicates the strength of primary trend. RSI is hinting for more downside showing no signs of divergence and oversold. We are expecting that the slippage below 3,528 levels that is acting as a strong support could drag it near 3,481 (Gann square of 57) levels.
Weekly Technical Forecast
On daily scale, the black gold is trading below 61.8% retracement as per Fibonacci analysis. We are expecting that the dark clouds of economic slowdown and slippage of crude imports by China could pressure the black gold prices more and a slippage below 3,522 levels could drag the prices to 3,348 and 2,994 levels as per 78.6% Retracement and re-test of previous lows respectively. MACD is hinting for more downside as the difference of (26, 12) days Moving Average and 9 days Moving Average is galloping.