Crude Oil Price Update – Upside Bias as Long as $49.13 Holds as Support

September West Texas Intermediate crude oil futures are trading higher shortly ahead of today’s U.S. Energy Information Administration’s weekly inventories report, due to be released at 1430 GMT.

Traders are expecting the report to show U.S. crude stockpiles dropped for a sixth week. Yesterday’s American Petroleum Institute’s inventories report showed a draw in crude oil, but a build in gasoline stocks.

Analysts expect today’s EIA report to show crude stocks fell by 2.7 million barrels. Gasoline inventories are expected to drop by 1.5 million barrels.

Technical Analysis

The main trend is up according to the daily swing chart. However, the closing price reversal top at $50.43 on August 1 has slowed the upside momentum.

A trade through $50.43 will negate the closing price reversal top and signal a resumption of the uptrend.

On the downside, support is a series of retracement levels at $48.52, $47.92, and a price cluster at $47.33 to $47.32.

Forecast

Based on the current price at $49.51, the direction of the crude oil market today is likely to be determined by trader reaction to the downtrending angle at $49.13.

A sustained move over $49.13 will indicate the presence of buyers. This could create the upside momentum needed to challenge the top at $50.43, followed by another long-term downtrending angle at $50.76. This is the last potential resistance angle before the $52.38 main top.

A sustained move under $49.13 is likely to trigger a labored break with initial targets at $48.52, followed by $48.40.

If $48.40 fails as support then look for the selling to extend into $47.92 then $47.32.

Look for an upside bias as long at $49.13 holds as support.