Crude Oil Price Update – Turns Extremely Bullish On Sustained Move Over $47.83

September West Texas Intermediate crude oil futures are inching higher on Thursday shortly before the regular session opening. The catalyst behind the rally is yesterday’s bullish U.S. Energy Information Administration report.

According to the EIA, crude oil inventories declined larger-than-expected. A larger-than-expected drop in gasoline inventories also helped drive prices higher as well as an unexpected drawdown in distillate supply.

Traders are also expressing optimism that next week’s key OPEC meeting will lead to production caps for Libya and Nigerian as well as possible cuts in exports by Saudi Arabia in August.

Technical Analysis

The main trend is up according to the daily swing chart. Today’s trade through the previous main top at $47.45 has reaffirmed the uptrend.

The market is also trading on the strong side of a major 50% level at $47.33. This price is new support. If the upside momentum continues then look for the rally to possibly extend into the major Fibonacci level at $48.52.

Forecast

Based on the current price at $47.51 and the earlier price action, the direction of the market today is likely to be determined by trader reaction to the long-term downtrending angle at $47.62.

A sustained move over $47.62 will indicate the presence of buyers. This could trigger a fast move into the steep uptrending angle at $47.83.

Crossing to the strong side of the angle at $47.83 will put crude oil in a bullish position with the next major target $48.52.

The inability to overcome the downtrending angle at $47.62 will signal the presence of sellers. This could lead to a quick break into a support cluster at $47.33 to $47.27.

The uptrending angle at $42.27 is the trigger point for an acceleration to the downside.

Basically, look for a bullish tone on a sustained move over $47.62 and a bearish tone on a sustained move under $47.27.