Crude Oil Price Update – API Report on Tap; Strengthens Over $56.82, Weakens Under $56.64

U.S. West Texas Intermediate crude oil futures are edging higher on Tuesday, boosted by the hope of a trade deal between the United States and China that could help dampen the threat of a slowdown in global demand growth. Gains are likely being limited by general uncertainty ahead of today’s American Petroleum Institute (API) weekly inventories report.

At 17:24 GMT, December WTI crude oil futures are trading $57.27, up $0.73 or +1.29%.

The API report, due to be released at 21:30 GMT, is expected to show an 800,000-barrel inventory build. However, refined products such as gasoline and distillates could show a draw down.

Daily Technical Analysis

The main trend is up according to the daily swing chart. The next upside target is the September 23 main top at $59.11. A trade through $53.71 will change the main trend to down.

The main range is $62.74 to $50.89. Its retracement zone at $56.82 to $58.21 is currently being tested. Trader reaction to this zone could determine the near-term direction of the market.

The intermediate range is $59.11 to 50.89. Its retracement zone at $55.97 to $55.00 is potential support.

Daily Technical Forecast

Based on the earlier price action and the current price at $57.27, the direction of the December WTI crude oil futures contract the rest of the session is likely to be determined by trader reaction to the price cluster at $56.82 to $56.64.

Bullish Scenario

A sustained move over $56.82 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the resistance cluster at $58.21 to $58.24. Sellers could come in on the first test of this area, however, taking it out could trigger an acceleration to the upside with $59.11 the next major upside target.

Bearish Scenario

A sustained move under $56.64 will signal the presence of sellers. This could trigger a steep break into the intermediate Fibonacci level at $55.97, followed by the steep uptrending Gann angle at $55.21.