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Will WTI crude oil prices break their key support level?

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Symmetrical triangle pattern

West Texas Intermediate (or WTI) crude oil shows the emergence of a symmetrical triangle pattern. Crude oil prices settled at $50.52 per barrel on March 3, 2015—just above the trend line support of the pattern. The US crude oil inventory report due today will fuel crude oil prices.

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Pivot points

On the downside, the key support for crude oil is at $48 per barrel. Prices hit this level several times in February and January 2015. On the other hand, resistance is at $52 per barrel. Resistance is established from the highs of February 10 and 19.

The crude oil chart shows that prices could move between $48 and $54 per barrel in the short term. Technical indicators—like the RSI (relative strength index)—are in overbought territory. Prices tend to fall at current RSI levels. However, the US crude oil inventory report due today could fuel crude oil prices. If the inventory build-up is more than estimated, it could drive prices lower. On the other hand, if the inventory data is below estimates, it should support crude oil prices. Traders should be cautious while trading crude oil, considering its recent volatility.

The increase in oil prices affects margins for oil ETFs like the VelocityShares 3X Long Crude ETN  (UWTI) and the Proshares Trust II (SCO). It also affects oil companies like Anadarko Petroleum (APC), ExxonMobil (XOM), and EOG Resources (EOG).

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