- The WTI Crude Oil market was bearish during Wednesday’s trading session, indicating a possible gap fill as prices continue to fall towards the $77.30 level.
- The market’s heavy candlestick confirms traders' sentiments, as some are now rethinking the idea of OPEC cutting production, as they anticipate a possible demand shrinkage.
- While the 50-Day EMA could offer some resistance, technical traders are more likely to fill the gap regardless of other indicators.
On the other hand, the Brent market also fell in the trading session on Wednesday, which threatens to fill the gap underneath. In the long term, it is likely that the market will continue to move toward the bottom of the gap around the $80 level. The 200-Day EMA has already offered significant resistance, and rallies are expected to be sold into, as the market remains bearish.
The oil markets have been heavily influenced by OPEC’s recent cut in production of 1.6 million barrels per day, creating concerns over supply in the market. However, the current bearish trend indicates that traders may have anticipated a wrong decision by OPEC, which could lead to further drops in prices. Moreover, a possible demand shrinkage could also weigh on prices as demand and supply continue to interact.
The Market Will Continue to be Challenging
Technical traders are looking to fill the gap as prices decline, indicating that the oil markets are a sell. The short-term trade could make sense as prices may reach the $80 handle, and traders are waiting to see if there are buyers. It is also worth noting that the 50-Day EMA is just an indicator and is not always religiously followed in the market.
Ultimately, the oil markets experienced a bearish trend during Wednesday's trading session, and it seems traders are considering a possible gap fill as prices continue to drop. The markets have been influenced by the OPEC cut in production and concerns over supply. However, the current situation indicates that traders are rethinking the decision, and a demand shrinkage could weigh on prices. Traders are selling in rallies, indicating that the markets are likely to continue to pay close attention to those gaps underneath that haven’t been filled yet. Regardless, this is a market that will continue to be challenging, as there are a lot of questions about the ability of economies around the world to grow.
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