Crude Oil Price Update – Weakens Under $20.49, Strengthens Over $20.58

U.S. West Texas Intermediate crude oil futures are drifting lower on Wednesday shortly before the release of the U.S. Energy Information Administration weekly inventories report at 14:30 GMT.

Traders are looking for a 3.7 million barrel build. We could see a surprise in the EIA report after the American Petroleum Institute (API) reported late Tuesday a 10.5 million barrel jump for the week-ending March 27.

The bearish API report is being blamed for today’s weakness along with demand destruction from the coronavirus pandemic and a price war between Saudi Arabia and Russia.

At 14:27 GMT, May WTI crude oil is trading $20.33, down $0.15 or -0.73%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through $19.27 will signal a resumption of the downtrend. The main trend will change to up on a move through $28.49.

The minor range is also down. A trade through $21.89 will change the minor trend to up. This will shift momentum to the upside.

The minor range is $19.27 to $21.89. Its 50% level or pivot at $20.58 is controlling the direction of the market today.

The short-term range is $28.49 to $19.27. If the minor trend changes to up then look for a potential surge into its retracement zone at $23.88 to $24.97.

Daily Technical Forecast

Based on the early price action and the current price at $20.33, the direction of the May WTI crude oil the rest of the session on Wednesday is likely to be determined by trader reaction to a price cluster at $20.49 to $20.58.

Bearish Scenario

A sustained move under $20.49 will indicate the presence of sellers. This could trigger a retest of this week’s low at $19.27. This is a potential trigger point for an acceleration to the downside.

Bullish Scenario

A sustained move over $20.58 will signal the presence of buyers. The first two targets are $21.70 and $21.89.

Taking out $21.89 with strong momentum could trigger an acceleration into $23.88 to $24.97 over the near-term.