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James Hyerczyk
Brent Crude Oil

International-benchmark Brent crude oil futures tumbled on Wednesday after government data showed large builds in refined product stockpiles. While data from the U.S. Energy Information Administration showed crude inventories fell 3.1 million barrels, lower than the 3.6 million barrel forecast, gasoline stocks rose 3.6 million barrels, compared with analysts’ expectations for a 925,000-barrel drop. Distillate stockpiles grew by 5.7 million barrels, much more than expectations for a 613,000-barrel increase, the EIA data showed.

On Wednesday, September Brent crude oil settled at $63.66, down $0.69 or -1.08%.

Daily September Brent Crude Oil

Daily Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the closing price reversal top at $67.64 on July 11.

The main trend will change to down on a trade through $62.07. A move through $67.64 will signal a resumption of the uptrend.

The short-term range is $58.47 to $67.64. Its retracement zone at $63.06 to $61.97 is the next downside target. Look for buyers to show up on the initial test of this potential support zone.

On the upside, the nearest resistance is a 50% level at $65.04.


Daily Technical Forecast

Based on Wednesday’s close at $63.66 and the early price action, the direction of the September Brent crude oil futures contract today is likely to be determined by trader reaction to the uptrending Gann angle at $63.32.

Bullish Scenario

A sustained move over $63.32 will indicate the presence of buyers. If this can generate enough upside momentum then look for a potential rally into a resistance cluster at $65.04 to $65.14.

Bearish Scenario

A failure at $63.32 will signal the presence of sellers. The first target is the 50% level at $63.06. Watch for buyers on this move.

If $63.06 fails then look for a potential acceleration to the downside with the next targets an uptrending Gann angle at $62.22, a main bottom at $62.07 and a Fibonacci level at $61.97.

Look out to the downside if $61.97 fails as support. This could trigger an almost $4.00 break over the near-term.

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