Crude Oil Prices look set to make Wednesday a second day of falls as the market still looks keen on taking some profit after this month’s rise to highs not seen since October.

News that US stockpiles increased very markedly this month is probably weighing on prices. Reuters reported an increase of 9.3 million barrels of crude, citing market sources basing their views on the most recent data from the American Petroleum Institute.

The Organization of Petroleum Exporting Countries’ group of heavyweight producers and their allies will meet next week. However, they’ve already affirmed an extension to existing output cuts amounting to over two million Barrels Per Day. Market-watchers don’t think any changes to this policy are likely, at least until the full ministerial meeting slated for June. But investors will still be wary as it’s not unknown for this group to throw the odd curveball.

Output reductions from the group don’t have quite the same impact on the market as they once did. Supply from outside it has expanded rapidly and exported crude from the United States, Canada, Guyana and Brazil can increasingly fill supply gaps. Even within the group, cuts aren’t always complied with. The latest reports suggest that OPEC is over-producing to the tune of 220,000 BPD.

Still, the market’s overall backdrop remains one of a well-supplied market meeting far-from certain demand. The prospect of lower interest rates across the industrial economies should help energy prices. But those lower rates themselves will depend on inflation coming to heel as hoped.

This week will bring a few more likely trading cues for the oil market. Final US growth data for the old year’s last quarter are coming up. They’re expected to have been revised lower. Closer to the market will be more oil inventory numbers, this time from the Energy Information Administration, and the snapshot of operational US oil-rig numbers from Baker Hughes.

West Texas Intermediate Crude Price Chart Compiled Using TradingView

Prices have been moving steadily higher since December and the broad overall uptrend channel wouldn’t appear to be under any serious threat at this point.

To its upside resistance lies some way above the current market at $84.06, with channel support much further below it at $75.60.

There is support much closer to hand however, at $79.34. That’s the third Fibonacci retracement of the rise up to the still-unchallenged peaks of September last year from the lows of May. If that support gives way the market could be headed for deeper falls, and, perhaps, a challenge to the current overall uptrend.

It’s notable that a downtrend line from June 2022 is coming into focus as well. It now offers resistance at $84.35. This isn’t a particularly well-respected downtrend, and it hasn’t often been tested. However, a consistent break above it could be a bullish signal for this market.