Crude Oil Price Update – Testing Session High as Traders Shrug Off Mixed EIA Report

U.S. West Texas Intermediate crude oil futures are inching higher at the mid-session on Wednesday after dipping slightly in response to a government report that showed a drop in U.S. crude stocks, but a rise in gasoline and distillate stocks.

At 17:23 GMT, February WTI crude oil is trading $47.89, up $0.11 or +0.23%.

U.S. crude stocks fell while gasoline and distillate inventories rose, the Energy Information Administration said on Wednesday.

Crude inventories fell by 3.1 million barrels in the week to December 11 to 500 million barrels, compared with analysts’ expectations in a Reuters poll for a 1.9 million-barrel drop.

U.S. gasoline stocks rose by 1 million barrels in the week to 238.9 million barrels, the EIA said, compared with analysts’ expectations in a Reuters poll for a 1.6 million-barrel rise.

Distillate stockpiles, which include diesel and heating oil, rose by 167,000 barrels in the week to 151.3 million barrels, versus expectations for an 886,000-barrel rise, the EIA data showed.

Net U.S. crude imports fell by 1.85 million barrels per day, EIA said.

Earlier in the session, oil prices were pressured as more European lockdowns and slower consumer spending tapped the brakes on a rally that has lifted futures by more than 30% in six weeks.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the intraday high at $48.06 will signal a resumption of the uptrend. The main trend will change to down on a move through $45.14.

The minor range is $45.14 to $48.06. Its 50% level at $46.60 is support.

The main support is the long-term Fibonacci level at $46.04. This level is controlling the near-term direction of the market.

Daily Swing Chart Technical Forecast

Due to the prolonged move up in terms of price and time, the direction of the February WTI crude oil market into the close will be determined by trader reaction to $47.78.

Bullish Scenario

A sustained move over $47.78 will indicate the presence of buyers. Taking out $48.06 will indicate the buying is getting stronger. This could create the upside momentum needed to challenge the March 3 main top at $49.07.

Bearish Scenario

A sustained move under $47.78 will put the market in a position to post a potentially bearish closing price reversal top. If confirmed, this could trigger the start of a 2 to 3 day correction with the first downside target coming in at $46.60, followed by $46.04.

A sustained move under $46.04 will send a bearish signal.