Crude Oil Price Update – Unexpected Jump in EIA Crude Inventories Weighing on Prices

U.S. West Texas Intermediate crude oil futures are trading lower on Wednesday after a government inventories report showed a larger-than-expected increase. The news comes one day after the International Energy Agency said the markets are “adequately supplied” and that “global spare production capacity remains at comfortable levels.”

According to the U.S. Energy Information Administration (EIA), crude inventories rose by 5.5 million barrels in the week to April 19, compared with analysts’ expectations for an increase of between 900K and 1.3 million barrels.

At 15:04 GMT, June WTI crude oil is trading $65.85, down $0.45 or -0.68%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through $66.60 will signal a resumption of the uptrend. The trend is safe for now, but there is room to correction into a 50% to 61.8% retracement zone.

The short-term range is $63.15 to $66.60. Its retracement zone at $64.88 to $64.47 is the first downside target. This is a value zone. Since the main trend is up, buyers are likely to come in on the first test of this area.

Daily Technical Forecast

Based on the early price action and the current price at $65.85, the direction of the June WTI crude oil futures contract the rest of the session is likely to be determined by trader reaction to the uptrending Gann angle at $65.65.

Bullish Scenario

A sustained move over $65.65 will indicate the presence of buyers. If this move is able to attract enough buyers then look for a possible retest of yesterday’s high at $66.60. Taking out this level is likely to drive the market into the longer-term downtrending Gann angle at $66.96.

Bearish Scenario

Taking out $65.65 and sustaining the move will signal the presence of sellers. This could trigger an acceleration into the support cluster at $64.92 to $64.88. Watch for buyers to return on the first test of this area.