Oil’s Dead Cat Bounce Ahead of Crude Inventories

Crude oil recouped some of its intra-session losses overnight, but the wolves are still circling.

Oil was whipsawed overnight, as both Brent and WTI fell over two percent in the New York trading session as news hit the wires that OPEC’s compliance level had dropped to 90%. Crude was saved by the bell, so to speak, by the API Crude Inventory numbers very late in the session. These showed an unexpectedly large drop in inventories of 4.2 million against an expected draw of 2.3 million barrels sending Brent and WTI up one percent.


Even with the late bounce in prices though, both Brent and WTI remain on their knees from a technical perspective. All attention may be on the FOMC this evening but for energy traders, far more important will be the official EIA Crude Inventories coming out 2.5 hours before the main event. The market is expecting a 3 million barrel draw down, and we can expect a decent move on a miss either way.


Brent spot trades at 50.50 in early Asia having broken and closed below its 200-day moving average at 50.95 overnight. Above here resistance is at 51.75. Support lies at 49.75 and then the March low at 49.50 close behind. A break here could see more stop loss selling.


WTI spot trades at 47.75 in Asia with two closes under its 200-day moving average now at 48.75. Behind this is a double top resistance at 49.00. Support lies at 47.10 and then the March low of 46.50. Like Brent, a break of the latter level could see another stampede for the exit.


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Jeffrey Halley

Jeffrey Halley

Senior Market Analyst, Asia Pacific
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley is OANDA’s senior market analyst for Asia Pacific, responsible for providing timely and relevant macro analysis covering a wide range of asset classes. He has previously worked with leading institutions such as Saxo Capital Markets, DynexCorp Currency Portfolio Management, IG, IFX, Fimat Internationale Banque, HSBC and Barclays. A highly sought-after analyst, Jeffrey has appeared on a wide range of global news channels including Bloomberg, BBC, Reuters, CNBC, MSN, Sky TV, Channel News Asia as well as in leading print publications including the New York Times and The Wall Street Journal, among others. He was born in New Zealand and holds an MBA from the Cass Business School.
Jeffrey Halley
Jeffrey Halley

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