WTI Crude Oil Daily Analysis – August 16, 2017

Crude oil prices edge higher on Wednesday morning after reports of a major draw in crude stocks pressure the market.

According to the API report – Crude oil inventories dropped by 9.16 million barrels at the end of last week which is the 11^th straight drawdown and more than expected on the week.

The EIA is due to release its official data later on today. Analysts expect a drop of 3.176 million in crude stocks in the U.S. last week, and a 1.527 million decline in gasoline inventories with distillate supplies down by 620,000 barrels.

Technical Outlook

Crude oil prices trade around a crucial support level at $47. This is the strongest support as per the Elliot Wave.

Crude oil 4H chart has formed the Elliot wave pattern. Price trade on the the fifth-wave which is usually in the direction of the larger trend and is expected to continue towards $51-$54. According to the above pattern, crude oil prices might rally in the days to come which would repeat the longest move of 1^st and 3^rd waves. Traders need to pay attention to the most important rule – fourth Wave should not break below first wave high at $47.

A break below $47 and a close of a candle will turn the momentum from positive to negative and prices might continue further towards $45.