Crude Oil Price Update – Bullish Over $45.65, Bearish Under $45.57

October West Texas Intermediate crude oil futures are trading higher shortly before the regular session opening. Traders still aren’t sure when the refineries are going to reopen on the Texas Gulf Coast so the bias is still to the downside, but today’s price action indicates investors may have found technical support. Until we find out when the refineries will reopen, U.S. inventories will grow by about 1.4 million barrels.

Besides the timetable for the reopenings, investors are also going to want to know at what capacity they will operate. Obviously, it’s going to take time to get back to the 96.6 capacity they delivered during the week-ending August 25.

Technical Analysis

The main trend is down according to the daily swing chart. A trade through $45.58 will signal a resumption of the downtrend. Today’s intraday low is $45.58. The rebound rally indicates that buyer came in to defend this bottom.

Because of the prolonged move down in terms of price and time, the market is ripe for a closing price reversal bottom. A higher close today will produce this chart pattern. This won’t mean the trend is changing to up, but it will set up the market for a strong retracement.

The main range is $42.52 to $50.51. Its retracement zone is $46.52 to $45.58. The market is currently sitting inside this zone. This area is controlling the longer-term direction of the market.

If a closing price reversal bottom does form or if a support base forms, then the next upside targets will be retracement zones at $47.25 to $47.64 and $48.05 to $48.63.

Forecast

Based on the current price at $46.09 and the earlier price action, the direction of the market today is likely to be determined by trader reaction to a long-term uptrending angle at $45.65 and a Fibonacci level at $45.57.

A sustained move over $45.65 will indicate the presence of buyers. This could create enough upside momentum to challenge the main 50% level at $46.52. This is a potential trigger point for an acceleration to the upside with potential targets coming in at $47.25, $47.64 and $47.76. Since the main trend is down, look for sellers to re-emerge on a test of $47.25 to $47.76.

A sustained move under $45.57 could trigger an acceleration to the downside with the next target angle coming in at $44.08. This is followed by a main bottom at $44.01.

Basically, look for an upside bias on a sustained move over $45.65 and a downside bias on a sustained move under $45.57.