Crude Oil Price Update – Bullish EIA Report Could Drive Market into $55.16

U.S. West Texas Intermediate (WTI) crude oil futures are edging higher on Wednesday on profit-taking and short-covering after nearly a weeklong sell-off. The catalysts behind the early strength are reports that OPEC could extend oil output cuts if the spread of the deadly coronavirus hurts demand, and an industry report showing a decline in U.S. stockpiles.

At 11:21 GMT, March WTI crude oil is trading $53.85, up $0.37 or +0.69%.

Later today at 15:30 GMT, official figures from the U.S. Energy Information Administration (EIA) will be released. The government report is expected to show a 700,000-barrel build. Late Tuesday, the American Petroleum Institute (API) reported a 4.3-million-barrel drop in crude oil inventories. Traders were pricing in a 482,000-barrel build.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through $52.13 will signal a resumption of the downtrend. The main trend will change to up on a move through $59.77. This is highly unlikely, but there is room for a normal 50% to 61.8% retracement over the near-term.

On the upside, the nearest resistance is a longer-term Fibonacci level at $55.99.

Daily Technical Forecast

Based on the early price action and the current price at $53.85, the direction of the March WTI crude oil market the rest of the session on Wednesday is likely to be determined by trader reaction to the steep downtrending Gann angle at $53.77.

Bullish Scenario

A sustained move over $53.77 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the long-term uptrending Gann angle at $55.16. Overtaking this angle will mean the buying is getting stronger with $55.99 the next potential target.

Bearish Scenario

A sustained move under $53.77 will signal the presence of sellers. This could trigger a break into another long-term uptrending Gann angle at $52.67. This is the last support before the $52.13 main bottom.