Oil prices were trading down significantly on Tuesday despite OPEC’s success at pulling a deal together to extend the production cuts into 2020. The hard-fought battle won, OPEC was unable to offset the dampened mood brought on by grim oil demand prospects and an unsettled US-China trade row. On the other hand, the American Petroleum Institute reported another large Crude oil inventory draw of 5 million barrels for the week ending June 27, a more ambitious draw than analysts had predicted at 2.484 million barrels. The focus will shift towards EIA data as they are expected to show crude inventories fell by 3.7 million barrels last week.
Crude prices free fell during yesterday’s session after a long divergence between the price and the momentum which began last week. Prices plummeted by nearly 5% and they are now hovering just below the $56.69 resistance level with a negative momentum. At this point we will be focusing on a little pull up in the prices before we focus on the downside again. The level to watch will be the $57.4 resistance level.
Support: 55.73 / 55.06
Resistance: 56.69/ 57.4