Crude inventory data has shown a massive build up once again as most of refineries are in a process of their maintaince. Now looking at the fundamentals, they have not changed – too much supply and not enough demand obviously. The most of the upward move which we experienced last week was pretty much based on speculations and now those bets are winding up. Although dollar weakness does impact the price and this pushes the price of oil higher but we need to look at the bigger picture which is the basic principle of supply and demand.
Crude oil is trading below its downward trend line on a 4 hour time frame. The RSI is trading in line with the price action which means that the price has a momentum behind it. However, it is important to note that the RSI is trading near the over sold region and if it falls below the level of 30, it could bring some potential buyers.