WTI bears taking control below the gap on demand concerns

WTI bears are in the market below the gap.
Demand concerns are driving the oil price lower.

West Texas Intermediate, WTI, is up by some 0.6% and has traveled within a range of between $75.24 and $74.08 so far. Following two days of losses that cut prices to the lowest since late March, the black gold is back on the mend in a mini short squeeze.

WTi has closed the gap that was put on the charts after OPEC+'s surprise 1.1-million barrel per day production cut. However, demand fears played in on Thursday after the United States reported its first-quarter Gross Domestic Product rose less than expected.

Real Gross Domestic Product advanced at a slower 1.1% QoQ AR clip in the first quarter with activity posting its first below-trend expansion since the second quarter of 2022, analysts at TD Securities noted. ´´First-quarter growth fell below consensus expectations at 1.9%, but it was largely in line with our 1.2% forecast. Under a context of rising uncertainty, we continue to look for activity to advance at a below-trend pace through the end of the year, with a recession likely starting in Q4 2023.´´

´´Still,´´ the analysts explained, ´´strong consumer-price data continue to underscore the stickiness of underlying inflation.´´

Nevertheless, the weak economic data continues to raise demand concerns and a recession in the United States could spark demand worries in other OECD nations. Meanwhile, the OPEC+ cuts will take effect on May 1. Today OPEC Secretary-General Haitham al-Ghais said the group was not looking to manage prices but is focusing on market fundamentals, according to reports.

Next up will be a weekly Baker Hughes rig-count report tomorrow at 1 pm ET.

WTI technical analysis

While below the gap resistance, the price is bearish on the front side of the trendline. A correction to the 38.2% Fibonacci has taken place already- on the 4-hour charts. However, there is plenty of support coming in which leaves the market in a sideways chop:

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