Crude Oil Price Update – Bullish Tone Could Build Over $50.30

November West Texas Intermediate crude oil futures are trading higher shortly before the regular session opening. Traders may be reacting to yesterday’s American Petroleum Institute’s weekly storage report which showed U.S. crude supplies climbed 1.4 million barrels for the week-ended September 15. Gasoline inventories declined by 5.1 million barrels. Distillate supplies also drew down by 6.1 million barrels.

There is also potentially bullish talk circulating that OPEC and other non-OPEC producing countries are discussing extending their production cuts program as well as deepening the cuts.

Today’s U.S. Energy Information Administration’s weekly inventories report is expected to show a 2.4 million barrel increase. Gasoline inventories are expected to decline by 800,000 barrels and distillate supplies are expected to show a draw of about 1 million barrels.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through $50.88 will signal a resumption of the uptrend. The next upside target is the May 25 top at $52.62.

The main retracement zone is $48.87 to $50.30. This zone is acting like support. Holding above this zone will solidify the market’s upside bias. The market has been straddling the upper or Fibonacci level at $50.30 all week. This price is likely to act like a pivot today.

Daily Forecast

Based on the current price at $50.47 and the earlier price action, the direction of the WTI crude oil market today is likely to be determined by trader reaction to the Fib level at $50.30.

A sustained move over $50.30 will indicate the presence of buyers. The first upside target is last week’s high at $50.88. Taking out this level could drive the market into the long-term downtrending angle at $51.46.

The angle at $51.46 is the trigger point for an acceleration to the upside with $52.62 the next major upside target.

A sustained move under $50.30 will signal the presence of sellers. If selling volume increases, we could see a break into the short-term uptrending angle at $49.39. This is followed by the major 50% level at $48.87.

Trader reaction to $50.30 will tell us if the buyers or sellers are in control.