Crude Oil Price Update – Down Ahead of EIA Data as Worries Build About Strength of Economy
U.S. West Texas Intermediate Crude Oil prices are edging lower shortly before the release of the U.S. government’s weekly inventories report at 14:30 GMT.
After yesterday’s steep technical reversal to the downside, prices are rebounding a little today, suggesting mixed fundamentals are driving the price action. There appears to a conflict between bullish traders who are betting on tight supply issues to drive prices higher, and bearish traders worried about a slowdown in global economic growth.
EIA Inventories Report on Tap
Traders expect today’s U.S. Energy Information Administration (EIA) weekly inventories report to show a drawdown in crude oil of 2.3 million barrels. This may come as a surprise since late Tuesday, the American Petroleum Institute (API) reported an unexpected rise in both U.S. crude and distillate inventories. Gasoline stockpiles, however, continued to slide.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through $120.88 will signal a resumption of the uptrend. A move through $100.66 will change the main trend to down.
The minor trend is down. It changed to down on Tuesday. This is controlling the momentum.
On the upside, the nearest resistance is a minor pivot at $117.54.
On the downside, quick support is a pair of 50% levels at $114.91 and $113.41. This is followed by the short-term retracement zone at $110.77 to $108.38.
Daily Swing Chart Technical Forecast
Trader reaction to $115.65 is likely to determine the direction of the August WTI crude oil market into the close on Wednesday.
A sustained move under $115.65 will signal the presence of sellers. Taking out the minor pivots at $114.91 and $113.41 will indicate the selling pressure is getting stronger.
A trade through $113.41 could trigger an acceleration to the downside with $110.77 – $108.38 the next key target area. Buyers could step in on a test of this zone.
A sustained move over $115.65 will signal the presence of buyers. Overtaking the pivot at $117.54 will indicate the buying is getting stronger with $120.88 – $121.17 the major upside objective.