U.S. GDP Beats Forecast But Crude Just Shrugs

Crude oil is trading sideways on Wednesday. In the North American session, West Texas Intermediate crude oil futures are trading at $57.96, down $0.37 or 0.51%. Brent crude oil futures are trading at $63.80, down $0.37 or 0.61%.

Crude Ignores EIA Inventory Surplus

There was cheery news ahead of Thanksgiving, as the U.S. economy improved in the third quarter. The economy increased at an annual rate of 2.1%, which was higher than the 1.9% estimate. Analysts had expected that the second-estimate GDP reading would confirm the initial release of 1.9%, and the upward revision was a pleasant surprise for investors. However, WTI crude remained flat, as it trades slightly above $58 a barrel. Elsewhere, the Energy Information Administration (EIA) weekly report pointed to a surplus for a fifth straight week. The surplus of 1.6 million surprised analysts, who had projected a draw-down of 0.5 million. This string of surpluses continues to put downward pressure on oil prices.

U.S. GDP Punches Past 2.0%

There was cheery news ahead of Thanksgiving, as the U.S. economy improved in the third quarter. Second-estimate GDP increased at an annual rate of 2.1%, which was higher than the 1.9% estimate. Analysts had expected that the GDP reading would confirm the initial release of 1.9%, and the upward revision was a pleasant surprise for investors. However, WTI crude remained flat, as it trades slightly above $58 a barrel.

Technical Analysis

With crude in a holding pattern, our technical analysis remains in place. The line of 58.15 remains fluid – currently, it is an immediate resistance line. Above, there is resistance at 59.30. This line, which has not seen action since mid-September, is protecting the symbolic 60.00 level.

On the downside, we find support at 57.50. Note that the 200-EMA and 50-EMA lines remain relevant and are additional barriers against downward movement. The 200-EMA is currently at 57.02 and is closely followed by the 50-EMA at 56.27.