Crude Oil Price Update -Major Support $45.58 to $45.57; Look Out Below if It Fails

October West Texas Intermediate crude oil futures are trading lower on Wednesday amid concerns over demand issues. The market is trading inside yesterday’s range which suggests investor indecision and impending volatility.

Investors aren’t sure how to play the market because they don’t know how long the refineries will be shut down. Every day the refineries are shut down, U.S. inventories will increase about 1.4 million barrels and that is bearish, but I think it’s already been priced into the market.

Later today, the U.S. Energy Information Administration is expected to announce that inventories fell by 1.8 million barrels during the week-ending August 25.

Technical Analysis

The main trend is down according to the daily swing chart. The next downside target is the swing bottom at $45.58. A trade through this level will signal a resumption of the downtrend with $44.01 the next likely target.

The main range is $42.52 to $50.51. Its retracement zone at $46.52 to $45.57 is currently being tested. Trader reaction to this zone will set the near-term tone.

Forecast

Based on the current price at $46.08, the key downside target is a support cluster at $45.58 to $45.57. Counter-trend buyers may come in on a test of this area. If it fails, however, then look for an acceleration to the downside with the next major targets $44.05 and $44.01.

Overcoming the 50% level at $46.52 will signal the presence of buyers. This may generate enough upside momentum to fuel a possible rally into the next downtrending angle at $47.89.

The key area today is $45.58 to $45.57. If this area fails then look out to the downside.