Crude Oil Price Update – Strengthens Over $46.68, Weakens Under $45.14; EIA on Tap

U.S. West Texas Intermediate crude oil futures are trading higher on Wednesday shortly before the release of the weekly government inventories report at 15:30 GMT. Prices are being supported as news about COVID-19 vaccines lifted investor hopes for a recovery in fuel demand and the U.S. Dollar, in which oil is traded, reached 2-1/2-year lows.

At 15:01 GMT, January WTI crude oil is trading $45.99, up $0.39 or +0.86%.

Traders also shrugged off yesterday’s potentially bearish American Petroleum Institute’s (API) weekly inventories report. The report showed that U.S. crude oil, gasoline and distillate stocks rose sharply last week, with crude stocks jumping by 1.14 million barrels against analyst forecasts for a draw of 1.42 million barrels.

Today’s EIA report is expected to show a 0.90 million barrel draw.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $46.68 will reaffirm the uptrend. The main trend will change to down on a move through $43.92.

The minor trend is also up. A trade through $45.14 will change the minor trend to down. This will also shift momentum to the downside.

On the upside, the resistance is a long-term Fibonacci level at $46.43.

The minor range is $43.92 to $46.68. Its 50% level at $45.30 is new support.

The short-term range is $40.33 to $46.68. Its 50% level at $43.51 is another potential support area.

Daily Swing Chart Technical Forecast

The direction of the January WTI crude oil market on Wednesday is likely to be determined by trader reaction to $45.30.

Bullish Scenario

A sustained move over $45.30 will indicate the presence of buyer. Overtaking $46.43 will put the market in a potentially bullish position. Taking out the swing top at $46.68 could trigger an acceleration to the upside with the next major target coming in at $48.88.

Bearish Scenario

A sustained move under $45.30 will signal the presence of sellers. Taking out the minor bottom at $45.14 could trigger an acceleration to the downside with the next targets $43.92 and $43.51.

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