The price of crude oil is trading down -$1.13 at $79.77. The low price did reach down to $78.53, and in doing so was able to chip into the gap from the OPEC+ production cuts from the April 1 weekend. On Friday March 31, the high price reached $75.70. On Monday, March 3, the low price reached $79 after the spike higher. Today's low price moved below the $79 level, but there is still a lot of room between it and the lower gap target at $75.70. Buyers have taken the price back into the post production cut range.
Looking at the hourly chart, the high prices this week were able to extend briefly above the sideways 200 hour moving average during Tuesday's trade (on a few occasions). However, the high price could only reach $81.52 when the 200 hour moving average was at $81.38. However, momentum quickly faded on each of the moves above the moving average, giving the sellers the go-ahead to push to the downside. Technically, staying below the 100 and 200 hour moving averages tilts the bias to the downside. It would take a move back above those moving averages to give the buyers more short-term control.
Having said that, the seller still have get back below - and stay below - the $79 level again. There is room to roam down to the $75.70 level, but $79 still needs to be broken.
Fundamentally, concerns about higher inflation tapping the consumer out is probably the best reason for the decline. Inventory data in crude oil stocks did not support that argument however as they showed a drawdown of -4.588 million versus expectations of -1.088 million draw. The gasoline stocks however did see a build of 1.3 million versus an expected drawdown of -1.267 million.
