Crude Oil Price Update – EIA Reports 9M Barrel Inventory Build – Lower than Expected

U.S. West Texas Intermediate crude oil futures are trading sharply higher on Wednesday shortly after the regular session opening and ahead of the release of the government’s weekly inventories report. The catalysts behind today’s early gains is an industry report that showed a smaller-than-expected build in U.S. inventories, as well as on the hope that global economies will reopen sooner than expected.

At 14:00 GMT, June WTI crude oil futures are trading $15.44, up $3.10 or +25.12%.

Official data from the U.S. Energy Information Administration (EIA) will be released at 14:30 GMT. Traders are looking for a build of 11.2 million barrels for the week-ending April 24.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $6.50 will signal a resumption of the downtrend. The main trend will change to up on a trade through the last main top at $33.15.

The minor range is $6.50 to $18.26. Its 50% level or pivot at $12.38 is controlling the direction of the market this week.

The short-term range is $33.15 to $6.50. Its retracement zone at $19.83 to $22.97 is the next upside target and possible resistance area.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at $15.44, the direction of the June WTI crude oil futures contract the rest of the session on Wednesday is likely to be determined by trader reaction to the pivot at $12.38.

Bullish Scenario

A sustained move over $12.38 will indicate the presence of buyers. If this is able to generate enough upside momentum then look for the rally to possibly extend into $18.26 to $19.83.

Bearish Scenario

A sustained move under $12.38 will signal the presence of sellers. This could trigger an acceleration to the downside with $6.50 the next major target.