Crude Oil Price Update – $80.98 Pivot Potential Trigger Point for Acceleration to Downside
U.S. West Texas Intermediate crude oil futures are edging lower early Wednesday in reaction to a mixed industry report as traders await the release of official U.S. government inventories figures at 14:30 GMT. Nonetheless, the market remains within striking distance of a seven-year high reached on Monday as an energy supply crunch continued across the globe.
At 07:45 GMT, December WTI crude oil futures are trading $81.80, down $0.64 or -0.78%.
In the United States, crude stocks rose while gasoline and distillate inventories fell last week, according to market sources citing American Petroleum Institute (API) figures on Tuesday.
Crude stocks rose by 3.3 million barrels for the week ended October 15. Gasoline inventories fell by 3.5 million barrels and distillate stocks fell by 3 million barrels, the data showed.
At 14:30 GMT, the U.S. Energy Information Administration (EIA) will release its weekly crude oil inventories data. The report is expected to show a 2.1 million barrel build.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart, but momentum is trending lower following the confirmation of Monday’s closing price reversal top.
A trade through $83.18 will negate the closing price reversal top and signal a resumption of the uptrend. A move through $78.78 will change the main trend to down.
The minor range is $78.78 to $83.18. The market is currently trading on the strong side of its pivot at $80.98, making it support.
The second minor range is $74.67 to $83.18. Its pivot at $78.93 is additional support.
Daily Swing Chart Technical Forecast
The direction of the December WTI crude oil market on Wednesday is likely to be determined by trader reaction to $82.13.
A sustained move under $82.13 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the minor pivot at $80.98.
Buyers could come in on the first test $80.98. However, this is also a potential trigger point for an acceleration to the downside with the next targets a pivot at $78.93 and a main bottom at $78.78. The main trend changes to down if the main bottom fails as support.
A sustained move over $82.13 will signal the presence of buyers. If this move generates enough upside momentum then look for buyers to make a run at $83.18. This is a potential trigger point for an acceleration to the upside with $85.25 the next potential target.