James Hyerczyk
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WTI Crude Oil

U.S. West Texas Intermediate crude oil futures are inching higher late in the session on Tuesday. The range is tight ahead of today’s American Petroleum Institute (API) weekly inventories report and Wednesday’s stockpiles report from the U.S. Energy Information Administration (EIA).

Capping prices today are worries over rising global coronavirus cases. Underpinning the market is a report of a blast in Saudi Arabia that may have disrupted supply, at least temporarily.

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At 17:53 GMT, March WTI crude oil is trading $52.58, down $0.19 or -0.36%.

The API will release its weekly inventories report at 21:30 GMT. Traders expect the report to show crude oil stockpiles rose by 1.6 million barrels the week-ending January 15. Last week, the API reported a surprise build.

Daily March WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, but momentum has been trending lower since the formation of the closing price reversal top on January 13.

A trade through $53.94 will negate the closing price reversal top and signal a resumption of the uptrend. A move through $47.31 will change the main trend to down.

The minor trend is down. This confirms the shift in momentum. A trade through $51.44 will indicate the downside momentum is getting stronger. Taking out $53.83 will change the minor trend to up and shift momentum to the upside.

The minor range is $53.94 to $51.44. The market is currently straddling its 50% level at $52.69.

The short-term range is $47.31 to $53.94. Its 50% level at $50.63 is the next potential support level. This price is also a potential trigger point for an acceleration to the downside.

The main range is $35.00 to $53.94. Its retracement zone at $44.47 to $42.24 is controlling the near-term direction of the market.


Short-Term Outlook

Based on the current price at $52.58, the direction of the March WTI crude oil market into the close is likely to be determined by trader reaction to $52.69.

Bullish Scenario

A sustained move over $52.69 will indicate the presence of buyers. If this move can create enough upside momentum then look for the rally to possibly extend into the minor top at $53.83, followed by the main top at $53.94.

Taking out $53.94 could trigger the start of the next leg up with the January 8, 2020 main top at $57.41 the next likely target price.

Bearish Scenario

A sustained move under $52.69 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the minor bottom at $51.44, followed by the pivot at $50.63.

The pivot at $50.63 is a potential trigger point for an acceleration to the downside with $47.31 the next likely target.

For a look at all of today’s economic events, check out our economic calendar.
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