Crude oil was the hottest topic of the day in market news today. The price of crude fell from $48.10 to $45.70 per barrel. That is a fall of 5 percent, clearly a mini-crash.
Oilprice.com attributes the mini-crash of crude oil to the supply situation referring to “little hope that global supply will decline in any meaningful way anytime soon, especially after it turned out that the cartel’s May output rose for the first time this year, on the back of recovering production in Nigeria and Libya.”
CNBC reported that stockpiles of oil in the United States surged by 3.3 million barrels in the week ended June 2, according to the Energy Information Administration, data released right before crude oil’s mini-crash. “That confounded analysts’ estimates for a 3.5 million-barrel decline.”
Crude oil price mini-crash on the chart
Whatever the news and supply/demand data, what mostly matters to investors is the price chart and the trends on the chart.
Crude oil’s price chart does not show any sign of concern (yet) after today’s mini-crash in crude. There is no meaningful change in the chart pattern or the trend. Today’s fall is just another sharp move like there have been so many in the past. Crude oil is a volatile asset.
The only way to neutralize that volatility is to follow chart patterns. That is a wise investor insight.
Visibly, the strong resistance area at $55 to 60 is dominating the chart. Crude was not able to break through that area since it crashed in 2014.
However, as long as crude does not move below $40 to $42 there is no harm done. It simply continues its consolidation.
The line in the sand, for crude oil, is $42. Between $42 and $55 it remains range bound, or, in other words, trendless, and any news or mini-crash is meaningless in the bigger scheme of things.
Our NEW report: The Most Practical Investment Guide For The Mega Bull Market In Cryptocurrencies, Tokens, ICOs and Blockchain Stocks. It includes 20 practical and actionable investment tips. Get access now >>
Follow official Ethereum prices in real-time. Read daily Ethereum price news on www.ethereumprice.today >>