Crude Oil Price Update – Gasoline Inventories Could Set the Tone Today

September West Texas Intermediate crude oil futures are trading slightly better shortly before the regular session opening and the release of the latest government inventories report later in the session.

Late Tuesday, the American Petroleum Institute reported a surprise build in weekly crude oil stocks. This could lead to a volatile reaction later in the session when the U.S. Energy Information releases its weekly inventories data since forecasts call for a 3.6 million barrel draw down.

According to the API, crude inventories rose by 1.6 million barrels in the week ending July 14 to 497.2 million barrels. Analysts were looking for a draw of 3.2 million barrels.

Gasoline stocks fell by 5.4 million barrels, compared to expectations for a 665,000-barrel decline.

Losses are likely being limited early today because of the strength of the gasoline numbers.

Technical Analysis

The main trend is up according to the daily swing chart but buyers are having a hard time reaffirming the uptrend due to a wall of resistance. A move through yesterday’s high at $47.14 will indicate the buying is getting stronger. A trade through the main top at $47.45 will reaffirm the uptrend.

A major retracement zone comes in at $47.33 to $48.52. This is the primary upside target. A downtrending angle passes through the zone at $47.74, making it a valid upside target also.

The short-term range is $43.83 to $47.14. Its retracement zone at $45.49 to $45.09 is the primary downside target, followed by another retracement zone at $44.86 to $44.25, which should be considered support.

Forecast

Based on the current price at $46.65, the market can move in either direction. However, the way of least resistance is to the downside while a rally is likely to be labored.

The first upside targets are a series of levels at $47.02 and a resistance cluster t $47.33. This price is the trigger point for an acceleration into $47.74.

On the downside, the nearest support angle comes in at $45.58. This is followed closely by $45.49 and $45.09.

Look for volatility with the release of the EIA report at 1430 GMT. The gasoline inventories number could be the difference maker today.