James Hyerczyk
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WTI Crude Oil

May West Texas Intermediate crude oil futures are trading better shortly after the release of the government’s weekly inventories report on Wednesday. The price action comes as a surprise since the report showed an unexpectedly large build.

U.S. crude oil stockpiles jumped by nearly 14 million barrels last week while fuel inventories plunged, as production and refining output slowly came back online in the wake of the Texas winter storms, the Energy Information Administration (EIA) said on Wednesday.

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At 16:46 GMT, May WTI crude oil futures are trading $64.29, up $0.30 or +0.47%.

Crude inventories rose by 13.8 million barrels in the week to March 5 to 498.4 million barrels, compared with analysts’ expectations in a Reuters poll for an 816,000-barrel rise. U.S. gasoline stocks fell by 11.9 million barrels in the week to 231.6 million barrels, the EIA said, compared with expectations for a 3.5 million-barrel drop. Distillate stockpiles fell by 5.5 million barrels versus expectations for a 3.5 million-barrel drop, the EUA data showed.

Daily May WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, but momentum has been trending lower since the formation of the closing price reversal top on March 8.

A trade through $67.79 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a trade through $59.08.

The short-term range is $59.08 to $67.79. Its retracement zone at $63.44 to $62.41 is support. This zone stopped the selling earlier today at $63.10. That move was expected since the main trend is up. A trade through $62.41 will be the unexpected move and that one could trigger a steep decline.

The minor range is $67.79 to $63.10. Its retracement zone at $65.45 to $66.00 is the next likely upside target. This zone is most important. Buyers are going to try to drive the market through this area. Aggressive counter-trend sellers are going to try to form a potentially bearish secondary lower top.


Short- Term Outlook

With the main trend up, look for an upside bias on a sustained move over $63.44. Although it won’t change the main trend to down, a break through $62.41 could trigger an acceleration to the downside.

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