Crude oil prices sank to the lowest level in five weeks, building on a technical breakdown noted yesterday. The drop began after energy giant ConocoPhillips (COP) reported first-quarter results that raised doubts about the lasting efficacy of an OPEC scheme to cut production and boost prices.

While the company managed a profit of $0.62 cents per share – the first positive result in two years – the details of the report looked ominous. Putting aside the positive contribution from divestment of assets in Canada and New Mexico as well as other one-off items, a loss of $0.02 was recorded.

This fell short of consensus forecasts calling for a flat result once special considerations were taken out of the equation. It also seemed to be interpreted to signal of general weakness in the industry as a whole, implying that price stabilization since early 2016 was doing little to practically improve fundamentals.

Crude was pushed further downward after Saudi Deputy Crown Prince Mohammed bin Salman said non-oil revenues exceeded expectations in the first quarter, hinting that the kingdom may not be as keen to pursue an extension of the OPEC supply reduction accord expiring mid-year.

The weekly API inventory flow data helped prices recover from session lows, reporting that stockpiles shed 4.16 million barrels last week. The spotlight now turns to official inventory numbers from the EIA. Prices may correct higher if the outcome is close to API’s estimate versus the 2.9 million barrel draw expected.

Gold prices marked time, waiting for the FOMC policy statement to cross the wires before making its next move. A sanguine tone despite slowing US growth in the first quarter may reinforce the likelihood of a rate hike in in June, sending the metal lower. A newly cautious posture may be supportive however.

GOLD TECHNICAL ANALYSIS – Gold prices paused to consolidate losses after sinking to a three-week low. From here, a daily close below the 1235.91-41.50 area (October 7 2016 low, 23.6% Fibonacciexpansion), exposes a horizontal inflection point at 1218.90. Alternatively, a reversal back above the 14.6% Fibat 1258.62 targets falling trend line resistance at 1285.75.