Crude Oil Price Update – U.S. Crude Stockpiles Fall More than Expected, Fuel Stocks Rise

December West Texas Intermediate crude oil futures are treading water ahead of today’s U.S. Energy Information Administration’s weekly inventories report. It is expected to show a draw of 4.7 million barrels.

Late Tuesday, the American Petroleum Institute said U.S. crude inventories fell by 7.1 million barrels in the week to October 13 to 461.4 million barrels.

Prices are also being underpinned by geopolitical tensions in Iraq and Iran. Traders are particularly interested in the military conflict between Iran and the Kurds since this is threatening to disrupt oil flows. A report earlier today showed a drop in the Kirkuk-Ceyhan pipeline to 225,000 barrels per day.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through this week’s high at $52.65 will indicate strong upside momentum. A move through $53.11 will signal a resumption of the uptrend.

If the market weakens then the first downside target will be the retracement zone at $51.71 to $51.27. If this zone fails then the next target zone will come in at $50.61 to $50.02.

Daily Forecast

Based on the early trade, the direction of the market today will be determined by trader reaction to the downtrending angle at $52.24.

A sustained move over $52.24 will indicate the presence of buyers. This could generate the upside momentum needed to challenge $52.65 and the downtrending angle at $52.67. This is the last potential resistance angle before the $53.11 main top.

A sustained move under $52.24 will signal the presence of sellers. The daily chart indicates there is plenty of room to the downside with the next targets the Fibonacci level at $51.71 and the uptrending angle at $51.44.

BREAKING NEWS:  The EIA reported that U.S. crude stockpiles fell by 5.7 million barrels. This was greater than the 4.7 million barrel forecast.