Crude Oil Price Update – Trader Reaction to $83.00 Will Set the Tone after API Inventories Report

U.S. West Texas Intermediate crude oil futures are edging lower late in the session on Tuesday and shortly before the release of the American Petroleum Institute’s (API) weekly inventories report at 20:30 GMT.

The report is expected to show a rise in U.S. crude inventory of 1.6 million barrels. On Wednesday, traders will get the opportunity to react to the latest crude data from the U.S. Energy Information Administration (EIA).

At 19:47 GMT, December WTI crude oil is trading $83.51, down $0.54 or -0.64%.

Last week, both the API and EIA reported larger than expected inventory builds, putting a cap on the market and driving prices lower.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down on October 28. A trade through $85.41 will change the main trend to up. A move through $80.58 will reaffirm the downtrend.

The minor range is $85.41 to $80.58. The market is currently trading on the strong side of its pivot at $83.00. This is followed by a second pivot at $82.10.

If the downtrend is reaffirmed then look for the selling to possibly extend into a pair of 50% levels at $80.04 and $79.12.

Daily Swing Chart Technical Forecast

The direction of the December WTI crude oil market into the close on Tuesday is likely to be determined by trader reaction to $83.00.

Bullish Scenario

A sustained move over $83.00 will indicate the presence of buyers. If the move is able to generate enough upside momentum then look for a move into $84.05, followed by $84.88 and the main top at $85.41. The latter is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under $83.00 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into $82.10.

Buyers could come in on the first test of $82.10. A failure to hold this level, however, could trigger an acceleration into the main bottom at $80.58.