U.S. West Texas Intermediate crude oil prices are trading lower on Wednesday shortly before the regular session opening. The market is being pressured by a report from the American Petroleum Institute (API) which showed a crude oil inventory build of 5.59 million barrels during the week-ending July 27 versus a forecast for a 2.794 million barrel draw. There was also a smaller than expected draw of gasoline inventories.
At 1153 GMT, September WTI crude oil is trading $67.87, down $0.89 or -1.29%.
Traders are also saying that signs that a supply disruption in the Bab al-Mandeb Strait in the Red Sea could be resolved are also weighing on prices. News that the U.S. may propose additional tariffs on China is also being viewed as a negative.
Daily Technical Analysis
The main trend is up according to the daily swing chart, however, momentum has shifted to the downside. A trade through $70.43 will signal a resumption of the uptrend. A move through $67.56 will change the main trend to down.
The minor trend is down. This trend is controlling the momentum.
The main range is $62.99 to $72.98. Its retracement zone at $67.99 to $66.81 is currently being tested. Trader reaction to this zone will determine the longer-term direction of the market.
The short-term range is $72.98 to $66.29. Its retracement zone at $69.64 to $70.42 is resistance. This zone stopped the rally earlier this week.
Daily Technical Forecast
Based on the current price at $67.82, the direction of the September WTI crude oil market the rest of the session is likely to be determined by trader reaction to the 50% level at $67.99.
A sustained move under $67.99 will indicate the presence of sellers. If this move generates enough downside momentum then look for the selling to extend into the support cluster at $66.87 to $66.81.
Look for an acceleration to the downside if $66.81 fails as support.
A sustained move over $67.99 will signal the presence of buyers. This could trigger a rally back into a downtrending Gann angle at $68.98.