Crude Oil Price Update – EIA Report Shows Unexpected Inventory BuildBased 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.
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 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.
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.
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.