Crude Oil Price Update – Could Turn Extremely Bearish Under $52.49 if EIA Reports Huge Inventory Build

U.S. West Texas Intermediate crude oil futures are trading lower shortly after the regular session opening. Traders are reacting to concerns over the slowing global economy and worries about U.S.-China trade relations. Both issues will affect future demand. Traders are also responding to yesterday’s weekly American Petroleum Institute’s weekly inventories report which showed an unexpected build.

At 1319 GMT, March WTI crude oil futures are trading $52.24, down $0.38 or -0.74%.

At 1600 GMT, traders will get the opportunity to react to the latest data from the U.S. Energy Information Administration’s weekly inventories report. It is expected to show a draw of 200,000 barrels. However, this could change in light of the API report.

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, momentum may be shifting to the downside with the formation of the closing price reversal top at $54.32 on January 22. A trade through this level will negate the formation and signal a resumption of the uptrend. A move through $50.66 will change the main trend to down.

The short-term range is $50.66 to $54.32. Its 50% level or pivot at $52.49 is controlling the price action today.

The main range is $42.67 to $54.32. If the trend changes to down then its retracement zone at $48.59 to $47.19 will become the primary downside target.

Daily Technical Forecast

Based on the early price action and the current price at $52.24, the direction of the March WTI crude oil market the rest of the session is likely to be determined by trader reaction to the pivot at $52.49.

Bullish Scenario

A sustained move over $52.49 will indicate the presence of buyers. This could fuel a labored rally with targets at $52.67 and $52.86.

The market could climb over $52.86 with the next potential targets coming in at $53.92 and $54.32.

Bearish Scenario

A sustained move over $52.49 will signal the presence of sellers. The daily chart is wide open to the downside under this level if selling volume can increase. This could trigger a move into a downtrending Gann angle at $50.73 then $50.66.