Crude Oil Price Update – Could Hit Dec. 2018 Bottom at $45.92 Next Week

U.S. West Texas Intermediate crude oil futures are trading lower after sellers thwarted an earlier attempted rally. The fundamentals are bearish with worries over lower demand due to the coronavirus outbreak and increasing supply offsetting a loss of production in Libya and expectations of additional production cuts by OPEC and its allies.

At 11:57 GMT, April WTI crude oil is trading $49.35, down $0.57 or -1.13%.

The API reported late Tuesday a smaller than anticipated crude oil inventory build of 1.3 million barrels for the week-ending February 21. Analysts were looking for a 3.0 million barrel build in inventory.

The API also reported a small build of 74,000 barrels of gasoline for the week-ending February 21, after last week’s 2.67-million-barrel draw. This week’s small build compares to analyst expectations for a 2.245-barrel draw for the week.

Distillate inventories were down by 706,000 barrels for the week, compared to last week’s 2.63-million-barrel draw, while Cushing inventories rose by 411,000 barrels.

At 15:30 GMT, the U.S. Energy Information Administration (EIA) will release its latest weekly inventory numbers. Traders are predicting a 2.3 million barrel build.

Daily Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down when sellers took out a pair of main bottoms at $49.63 and $49.50. A trade through $54.66 will change the main trend to up.

Daily Technical Forecast

April WTI crude oil is currently walking down a steep Gann angle, moving at a rate of $1.00 per day from the $54.66 main top. This angle comes in at $50.66 today.

Look for downside pressure as long as the market remains on the bearish side of the downtrending Gann angle at $50.66.

If the market continues to follow the Gann angle lower then look for an eventual test of the December 24, 2018 bottom at $45.92 around March 4.

Momentum will shift to the upside if the downtrending Gann angle fails as resistance.