Crude Oil Futures: Corrective downside in the offing

CME Group’s flash data for crude oil futures markets noted investors trimmed their open interest positions by more than 41K contracts on Wednesday, adding to Tuesday’s drop. Volume followed suit and went down by around 408.2K contracts after two consecutive daily pullbacks.

WTI: Potential drop to $100.50

Prices of the WTI extended the sharp upside on Wednesday encouraged by the fragile geopolitical situation in Ukraine. The move higher, however, was sustained by short covering as noted by declining open interest and volume. Against that, and coupled with the strong oversold condition, a corrective move should not be ruled out sooner rather than later and with the potential target at $100.50 (high February 24).