Crude Oil Price Update – Strengthens Over $57.76, Weakens Under $57.26

U.S. West Texas Intermediate crude oil futures are trading higher shortly before the regular session opening and today’s U.S. Energy Information Administration’s weekly inventories report at 14:30 GMT.

Helping to boost prices higher today is a bullish American Petroleum Institute’s (API) weekly inventories report that showed an unexpected drawdown. According to the API, crude oil inventories fell 2.6 million barrels for the week-ending March 8. Traders were looking for a build of 2.655 million barrels. The API also reported a large draw of 5.8 million barrels in gasoline inventories.

At 11:29 GMT, May WTI crude oil futures are trading $57.71, up $0.50 or +0.69%.

According to estimates, today’s EIA report is expected to show a 2.9 million barrel build. This could change in reaction to the API data.

Daily Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. A trade through $58.26 will change the main trend to up. A move through $54.87 will signal a resumption of the downtrend.

The minor trend is up. This is helping to support the upside momentum.

The short-term range is $58.28 to $54.87. Its 50% level or pivot at $56.58 is support.

Daily Technical Forecast

Based on the early price action, the direction of the May WTI crude oil futures contract on Wednesday is likely to be determined by trader reaction to the downtrending Gann angle at $57.76.

Bullish Scenario

A sustained move over $57.76 will indicate the presence of buyers. Overcoming an uptrending Gann angle at $57.87 will indicate the buying is getting stronger. This could lead to a test of the next downtrending Gann angle at $58.01. This is the last potential resistance angle before the $58.26 main top. A drive through this top will change the main trend to up.

Bearish Scenario

The inability to overcome $57.76 will signal the presence of sellers. If this creates enough downside momentum then look for the break to possibly extend into the downtrending Gann angle at $57.26. This is a potential trigger point for an acceleration to the downside with the next target the short-term pivot at $56.58.