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James Hyerczyk
EIA Oil Report

U.S. West Texas Intermediate crude oil futures are trading lower on Wednesday. The selling is being fueled by fears over a U.S. recession after the 2 and 10-year Treasury yields inverted for the first time since 2007. Weaker than expected economic data from China also weighed on prices. Concerns about demand were also raised after a report showed the Euro Zone’s GDP barely grew in the second quarter of 2019.

At 14:56 GMT, October WTI crude oil is trading $55.21, down $1.90 or -3.30%.

In other news, Tuesday’s American Petroleum Institute’s (API) report said crude oil inventories increased by 3.7 million barrels to 443 million, compared with analyst expectations for a decrease of 2.8 million barrels. On Wednesday, the U.S. Energy Information Administration (EIA) said crude inventories increased by 1.6 million barrels during the week-ending August 9. Traders were looking for a 2.5 million barrel draw down.

Daily October WTI Crude Oil

Daily Technical Analysis

The main trend is down according to the daily swing chart. The main trend will change to up on a trade through $58.86. A trade through $50.50 will signal a resumption of the downtrend.

The main range is $60.93 to $50.50. Its retracement zone at $55.72 to $56.95 is controlling the near-term direction of the market. It’s also resistance.

The short-term range is $50.50 to $57.40. Its retracement zone at $53.95 to $53.14 is the next downside target zone.


Daily Technical Forecast

Based on the early price action and the current price at $55.21, the direction of the October WTI crude oil market on Wednesday is likely to be determined by trader reaction to the downtrending Gann angle at $54.93.

Bearish Scenario

A sustained move under $54.93 will signal the presence of sellers. If this move creates enough downside momentum then look for a drop into the short-term 50% level at $53.95. This is followed by a short-term Fibonacci level at $53.14, followed closely by an uptrending Gann angle at $53.00. This price is a potential trigger point for an acceleration into the next uptrending Gann angle at $51.75.

Bullish Scenario

A sustained move over $54.93 will indicate the presence of buyers. The first two upside targets are an uptrending Gann angle at $55.50 and the main 50% level at $55.72. Overcoming $55.72 will indicate the buying is getting stronger with the next two targets $56.95 and $57.40.

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