WTI Crude Oil Daily Analysis – December 20, 2017

Crude oil prices edged higher on Tuesday and trade slightly higher on Wednesday morning as investors considered the outlook of Middle East supply disruptions amid rising geopolitical tensions in the region after reports suggested that a missile was fired at Riyadh from Yemen.

The government-run Center for International Communication reported on its Twitter account: “Coalition forces confirm intercepting an Iranian-Houthi missile targeting (the) south of Riyadh. There are no reported casualties at this time.”

The American Petroleum Institute reported that US crude stocks fell by 5.222 million barrels last week, while gasoline inventories rose by 2 million barrels and distillate stocks dipped 2.9 million barrels. Stocks at the storage hub of Cushing, Oklahoma rose by 70,000 barrels.

Analysts estimated that crude stocks were down 3.769 million barrels, with an 870,000 barrels drop in distillates and 1.895 million barrels build in gasoline seen.

The US Energy Information Administration is due to release its report later on today.

Technical view

Crude oil 4H chart has formed a “Symmetrical Triangle” pattern. The last few sessions seem to be strongly bullish as prices retested in the channel’s support line and bounced back.

As per the technical aspects of the pattern, the retest is expected to push the market furthermore and the upside rally could test $58-$58.50 levels in the upcoming sessions. Long-term Resistance holds at $58.50 and Support holds at $57.