Bottom line:  WTI Crude registers historic lows at $0.01 per barrel with May futures dropping deep into the negative territory. Prices may consolidate after such an unprecedented move and it might be good to remain flat.

Fundamental Outlook:

WTI Crude drops historically, printing below the $1 per barrel mark yesterday. The year 2020 has seen 65.62 being print in early January and now 0.01 lows in April. OPEC members had agreed to cut production by around 10 million per day, along with Russia and Saudi Arabia agreeing to end price war. Nothing could stop a 99.95% drop in WTI Crude prices yesterday.

WTI trades around 21.34 at this point and could rally further to 29.11 in the next few trading sessions. Furthermore, the May Futures contract in WTI Crude registered a historic print at -$37 per barrel, an unprecedented -305% decline.

Events to watch today:

05:00 AM EST Euro Zone ZEW Survey

05:00 AM EST German ZEW Survey Expectations

Technical Analysis:

WTI Crude witnessed a historic collapse yesterday with over 99.95% decline in price, closing below $1 per barrel mark. The commodity has gaped higher and is seen to be trading around 21.34 at this point in writing. Bears are expected to remain in control until 29.11 remains intact.

Immediate price resistance is seen at 29.11, the April 03 high, and WTI Crude short term outlook remains bearish as long as it trades lower. The commodity might consolidate in a range after yesterday’s move.

Structurally, a 5 wave decline from 65.62 levels seem to be complete yesterday. Wave 4 termination was around the 28.30/29.11 mark and a break higher is required to confirm that a meaningful low is in place.

Traders might be staying aside for now and allow price action to confirm a break above 29.11. A corrective drop thereafter, might be good to initiate long positions.

Prepared by

Harsh Japee, Technical Analyst.

WTI Crude Chart

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