West Texas Intermediate (WTI) weakens as oil inventories unexpectedly rise

February 24, 2021 - 2 days ago
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The benchmark for New York-traded, crude oil price action has been choppy since the U.S. oil stockpiles unexpectedly rose last week, despite an arctic cold snap that swept across Texas, which caused power cuts that affected more than 20 refineries in Texas, Louisiana and Oklahoma, with a combined processing capacity of over 5.5 million barrels a day.

U.S. crude inventories rose 1.026 million barrels last week, according to an estimate released on Tuesday by the American Petroleum Institute, after a fall of 5.8 million barrels the previous week.

Due Thursday, the official government report is expected to show weekly U.S. crude supplies declined by about 5.190 million barrels last week.

From the technical aspect, bearish divergence is still evident.

Traders can take advantage of divergence by using a variety of trend-based strategies.

Divergence is a popular trading signal because they are dynamic and most often offer a reliable, high-quality trading signal reversal when combined with other trading tools and concepts.

In technical analysis, divergence can be a significant warning signal that a bullish or bearish trend is coming near an end.

Divergence appears when a technical indicator (oscillator) begins to establish a trend that disagrees with the actual price movement.

These “disagreements” are strong signals and somewhat useful for the trader/investor.

At present, the upside views a potential target of $65.00-25 before any bearish reversal.

Conversely, a New York close beneath $59.30 should give a bearish call to $57.00-25. Reassess from there.

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