Crude Oil Price Update – Straddling $52.69 Pivot Ahead of EIA Inventories ReportThe direction of the March WTI crude oil market on Wednesday is likely to be determined by trader reaction to the pivot at $52.69.
U.S. West Texas Intermediate crude oil is trading higher on Wednesday shortly before the regular session opening at 13:00 GMT and the release of the latest inventories data from the U.S. Energy Information Administration (EIA) at 15:30 GMT.
Prices are being support after industry data released late Tuesday showed U.S. crude inventories fell unexpectedly and as concerns eased about a resurgence in coronavirus cases in China, the world’s second-biggest oil user.
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At 10:55 GMT, March WTI crude oil is trading $52.95, up $0.34 or +0.65%.
The American Petroleum Institute (API) said U.S. crude inventories fell by 5.3 million barrels. Analysts were pricing in a build.
Today’s EIA inventories report is expected to show a build of 1.6 million barrels for the week-ending January 22. Last week, the government reported an unexpected build of 4.4 million barrels.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of a closing price reversal top on January 13.
A trade through $53.94 will signal a resumption of the uptrend. The main trend will change to down on a move through $47.31.
The minor trend is down. This is controlling the momentum. A trade through $51.44 will indicate the selling is getting stronger.
The minor range is $53.94 to $51.44. The market has been straddling its pivot at $52.69 the last four sessions. Trader reaction to this price will likely set the tone of the market on Wednesday.
The short-term range is $47.31 to $53.94. If the minor trend continues to move lower, then its 50% level at $50.63 will become the next downside target.
The key support is the retracement zone at $50.12 to $49.22.
Daily Swing Chart Technical Forecast
The direction of the March WTI crude oil market on Wednesday is likely to be determined by trader reaction to the pivot at $52.69.
A sustained move over $52.69 will indicate the presence of buyers. If this move creates 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.
A sustained move under $52.69 will signal the presence of sellers. This could extend the break into the minor bottom at $51.44. If this level fails as support then look for a possible test of $50.63.