Crude Oil Price Update – EIA Report Shows Inventories Surged by 7.1 Million Barrels

U.S. West Texas Intermediate crude oil futures are trading sharply lower shortly before the release of the weekly Energy Information Administration’s weekly inventories report at 15:30 GMT. The government report is expected to show a 1.2 million barrel build. However, today’s price action suggests traders may be looking for an even larger build after the American Petroleum Institute’s weekly support on Tuesday showed an unexpected 7.3 million barrel build.

At 15:23 GMT, April WTI crude oil futures are trading $55.54, down 1.02 or -1.77%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has shifted to the downside with the formation of the closing price reversal top on March 1.

A trade through $55.02 will change the main trend to down. A move through $57.88 will negate the closing price reversal top and signal a resumption of the uptrend.

The short-term range is $51.62 to $57.88. If the trend changes to down then look for a break into its retracement zone at $54.72 to $53.98.

Daily Technical Forecast

Based on the early price action, the direction of the April WTI crude oil futures contract the rest of the session is likely to be determined by trader reaction to the uptrending Gann angle at $55.62.

Bullish Scenario

Holding above $55.62 will indicate the return of buyers. If this creates enough upside momentum then look for the rally to possibly extend into the downtrending Gann angle at $56.38. This is followed closely by an uptrending Gann angle at $56.52.

Overtaking $56.52 will indicate the buying is getting stronger with the next upside target a downtrending Gann angle at $57.13.

Bearish Scenario

Taking out $55.62 will signal the selling is getting stronger. This could trigger a further break into the main bottom at $55.02 and the long-term uptrending Gann angle at $55.00.

If $55.00 fails then look for the selling to extend into the major retracement zone at $54.72 to $53.98. Watch for buyers on a test of this zone.