Survives a new 18 year low and record build in inventory
The price of WTI crude oil is back above the $20 level and is up on the day. The price it is currently trading at $20.27. That's up $0.16 on the day. The low for the day reached $19.20. That low took out the low from the end of March at $19.27, and in the process made a new low going back to 2002. That's a long time ago.
Getting above the $20 level is one positive accomplishment. The other accomplishment today was the market survived a record build and inventories of 19.248M barrels. The inability to go lower has forces some modest short covering.
One other potentially positive for oil is as supply out strips demand and inventories build, there is a limit to where the oil can go physically. If extracted oil is no place to be stored or shipped, there is no reason to pump it. As a result there may be an involuntary decline in production greater than what OPEC++ imagined.
Does that lead to a rebound?
Well perhaps for a while, but to be sustained, the overflow of inventory needs to be whittled away. Another big event would be the winding down of shuttering with people going back to work. Roads are empty. People are cooped inside. Relatively speaking, even if a portion of the population has back to work, it is better than what is happening now. Also recall the price was in the $50s in February. With the price at $20, there is room to roam on increased optimism.
Having said that, don't mess around if the lows are taken out again. The trend is still lower most of the fundamental news is still leaning to the bearish side. However the fundamental and technical story can change. So be aware.
