Crude Oil Price Update – Crude Oil Weakens Despite Potentially Bullish EIA Inventories Report
U.S. West Texas Intermediate crude oil futures are trading flat to lower shortly after the release of a potentially bullish government storage report. According to the U.S. Energy Information Administration (EIA), crude inventories fell by 6.9 million barrels during the week-ending September 6. Traders were looking for a decrease of 2.7 million barrels.
At 14:48 GMT, October WTI crude oil futures are trading $57.20, down 0.20 or -0.38%.
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The report failed to impress traders and an attempted rally failed to gain traction before the market turned lower.
Daily Technical Analysis
The main trend is up according to the daily swing chart, but momentum is beginning to shift to the downside with the formation of the closing price reversal top at $58.76 on Tuesday. This could trigger the start of a 2 to 3 day correction.
A trade through $58.76 will negate the closing price reversal top and signal the resumption of the uptrend.
The minor trend is also up. A trade through $54.83 will change the minor trend to down. This will be a confirmation of the shift in momentum.
The main range is $60.93 to $50.50. Its retracement zone at $56.95 to $55.72 is potential support.
Daily Technical Forecast
Based on the early price action and the current price at $57.20, the direction of the October WTI crude oil futures contract the rest of the session on Wednesday is likely to be determined by trader reaction of the downtrending Gann angle at $57.95. This angle stopped the rally earlier in the session.
Bearish Scenario
A sustained move under $57.95 will indicate the presence of sellers. The first target is a potential support cluster at $57.05 to $56.95.
If $56.95 fails as support then look for the selling to possibly extend into the next uptrending Gann angle at $56.50. Since the main trend is up, buyers could come in on a test of this angle. If it fails then look for a steeper break into $55.84 to $55.72.
Bullish Scenario
Overtaking $57.95 will signal the return of buyers with $58.76 to $58.86 the next likely upside target.