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Crude Oil Price Update – Oil Inventories Plunge but Gains Capped by Jump in Refined Products

By:
James Hyerczyk
Published: Jul 30, 2020, 00:19 UTC

Based on the early price action the direction on Thursday is likely to be determined by trader reaction to the minor pivot at $41.24.

WTI Crude Oil

U.S. West Texas Intermediate crude oil futures finished higher on Wednesday after a government report showed U.S. crude oil stockpiles fell by nearly 11 million barrels last week as imports dropped. This news would have normally sent prices sharply higher, but during the coronavirus pandemic, things are not normal. Gains were capped because low COVID-19 driven demand led to a rise in product inventories.

At 23:46 GMT, September WTI crude oil is trading $41.28, up $0.01 or +0.02%.

According to the U.S. Energy Information Administration (EIA), crude inventories fell by 10.6 million barrels in the week to July 24 to 526 million barrels. Analysts were looking for a 1 million barrel build.

Net U.S. crude imports fell 1 million barrels per day, the EIA said, dropping to 1.9 million bpd. More importantly, U.S. gasoline stocks rose by 654,000 barrels, the EIA said, compared with forecasts for a 733,000-barrel drop. Distillate stockpiles also jumped by 503,000 barrels, versus expectations for a 267,000-barrel drop, the EIA data showed.

Daily September WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The main trend will change to down on a trade through $40.48. A move through $42.51 will signal a resumption of the uptrend.

The minor range is $39.97 to $42.51. The market straddled its 50% level at $41.24 most of the session.

The main retracement level resistance is $41.72. This is a long-term 50% level.

The short-term range is $37.32 to $42.51. Its 50% level at $39.26 is support.

Daily Swing Chart Technical Forecast

Based on the early price action the direction on Thursday is likely to be determined by trader reaction to the minor pivot at $41.24.

Bullish Scenario

A sustained move over $41.24 will indicate the presence of buyers. This could trigger a rally into the major 50% level at $41.72. Overtaking this level will indicate the buying is getting stronger with the next target $42.51.

Bearish Scenario

A sustained move under $41.24 opens the door to a possible retest of this week’s low at $40.48. The trend changes to down on a trade through this bottom. This could lead to a test of the next main bottom at $39.97, followed by a 50% level at $39.26.

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

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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