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James Hyerczyk
WTI Crude OIl

U.S. West Texas Intermediate crude oil futures are trading lower late Tuesday ahead of the release of the American Petroleum Institute weekly inventories report at 20:30 GMT. Traders are looking for a 2.9 million barrel draw down, but the price action doesn’t appear to be reflecting this event. Furthermore, four days of sideways to lower price action indicates buyers are more concerned about lower demand amid the escalating trade conflict between the United States and China.

At 18:13 GMT, September WTI crude oil is trading $54.17, down $0.52 or -0.93%.

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A larger than expected draw down will temporarily erase these fears, and could trigger a strong late session rally. However, an API report miss combined with the bearish tone could send prices sharply lower.

Daily September WTI Crude Oil

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through $53.59 will signal the resumption of the downtrend after three days of sideways action. This could lead to an eventual test of a pair of bottoms at $51.15 and $50.91.

The main trend will change to up on a trade through $58.82. This is highly unlikely today, but a late session reversal to the upside will indicate there is still some upside momentum in the market.

The near-term direction is being controlled by a retracement zone, bounded by $55.29 and $52.78.


Daily Technical Forecast

Based on the early price action and the current price at $54.17, the direction of the September WTI crude oil market into the close is likely to be determined by trader reaction to the uptrending Gann angle at $54.22.

Bearish Scenario

A sustained move under $54.22 into the close will indicate the presence of sellers. If this move creates enough downside momentum then look for sellers to take out $53.59. This could lead to a test of the Fibonacci level at $52.78. This is a potential trigger point for an acceleration into $51.15 and $50.90.

Bullish Scenario

A sustained move over $54.22 will signal the presence of late session buyers. This could trigger a rally into the 50% level at $55.29. This is a potential trigger point for an acceleration to the upside.

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