WTI Crude Oil Daily Analysis – August 31, 2017

Crude oil futures dipped lower on Wednesday and continue to trade lower on Thursday morning as overflow from Tropical Storm Harvey continued to knock down US refinery capacity. It was the ninth-straight week of waning crude inventories.

According to sources – Refineries with output of 4.2 million barrels per day (bpd) were offline on Tuesday, indicating nearly 23 percent of U.S. production,

The EIA report revealed that crude stockpiles fell more than expected last week but gains were moderate as investors focus on the Harvey storm’s impact.

U.S crude inventories fell by approximately 5.4m barrels in the week ended Aug 25, beating expectations of a draw of about only 1.9m barrels.

Technical Outlook

Short Term View

Crude oil prices were unable to break above the resistance area. Selling pressure continues towards $45.44 level as both short term and long term pattern indicates a bearish momentum.

The 4H intraday chart has formed the “Descending broadening wedge pattern” as prices broke below support line at $47.40.

Long-term View

The daily chart has formed Megaphone chart pattern as prices failed to hold above resistance line at $50. Currently, prices trade below the 50-day moving average at $46.05 which indicates a bearish momentum.

Resistance holds on the 50-day moving average at $46.48. The market might soon reverse downside towards $45-44.