Crude Oil Price Update – Under Pressure After API Reports Bigger-Than-Expected Build

March West Texas Intermediate Crude Oil futures are under pressure early Wednesday. The catalyst behind the weakness is a reported build by the American Petroleum Institute (API).

According to the API, U.S. crude oil inventories rose 3.229 million barrels for the week-ending January 23. Analysts had expected only a small build of 126,000 barrels. Gasoline inventories increased 2.692 million barrels for the week-ending January 23. Analysts were looking for a build of 1.809 million barrels.

Daily Swing Chart Analysis

The main trend is up according to the daily swing chart, however, momentum shifted lower with the formation of the closing price reversal top on January 25.

A trade through $66.66 will negate the closing price reversal top and signal a resumption of the uptrend. Additional resistance is the June 10, 2015 main top at $66.16, the May 12, 2015 main top at $66.89 and the February 3, 2017 main top at $68.27.

A move through $62.78 will change the main trend to down.

Earlier today, the market crossed to the weak side of a major 50% level at $64.11. This is an early indication that the selling is getting stronger.

The main range is $56.07 to $66.66. If the trend changes to down then its retracement zone at $61.37 to $60.12 will become the primary downside target.

Daily Swing Chart Forecast

Based on the early trade, the direction of the crude oil market today will be determined by trader reaction to the major 50% level at $64.11.

A sustained move under $64.11 will indicate the presence of sellers. If selling volume increases then look for a possible acceleration to the downside with $62.78 the next likely target.

A sustained move over $64.11 will signal the presence of buyers. This could generate enough upside momentum to retrace about 50% from the $66.66 main top.

The catalyst behind the price action today will be the U.S. Energy Information Administration’s weekly inventories report.