WTI Crude Oil (current price: 38.70)
Oil’s oversold bounce continued on Wednesday as we expected. The crucial commodity quickly got back to the upper line of the short-term trend channel that we have been monitoring recently. U.S. inventories declined from record highs by 4.9 million barrels, but remain en historically elevated levels, close to the maximum storage capacity. The global supply situation still looks bleak, even though the U.S. output has been steadily declining in recent months.
Our assessment: Oil trades at an important decision point following a strong two-day bounce, as investors try to figure out whether the short-term declining trend is still intact or not. Odds favor further downside as global growth worries persist.
