Oil prices slumped as low as $64 this week, but a sharp rally to $70 will give bulls another shot at a low.
USOIL – Daily Chart
The $70 level has been a key support for the US crude oil price, and black gold will have to find continued strength to claim this as a low.
On Tuesday, the latest data from the American Petroleum Institute said that US crude inventories rose by around 3.3 million barrels this week, which would be negative after 1.6 million barrels of drawdown was expected. Data from the Energy Information Administration will confirm or deny that figure on Wednesday.
Crude Oil Forecast
Traders are placing more weight on the hopes of a pause in interest rates from the US Federal Reserve. The market expects the Fed to raise rates by 25 basis points on Wednesday. Still, many analysts feel they will pause or delay rate hikes while waiting for the banking sector to strengthen. A pause in interest rate hikes would boost economic activity and fuel demand.
