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Crude Oil Price Update – API Report Expected to Show 4.1M Barrel Draw Down

James Hyerczyk

U.S. West Texas Intermediate crude oil futures are trading lower late Wednesday as traders await the American Petroleum Institute (API) weekly inventories report, due to be released at 21:30 GMT. With no immediate retaliation from Iran, some of the tensions between the United States and Iran have simmered. This encouraged speculators to book profits after a two-day price spike.

At 19:49 GMT, February WTI crude oil is trading $62.68, down $0.59 or -0.92%.

Today’s API report is expected to show U.S. stockpiles likely fell for the fourth straight week during the week-ending January 3. Refined product stocks are expected to have risen. According to a Reuters poll, the average estimate by six analysts was for crude oil stocks to have fallen by 4.1 million barrels in the week to January 3.

Daily February WTI Crude Oil

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through $64.72 will signal a resumption of the uptrend. The main trend will change to down on a move through $60.63.

The minor trend is also up, however, Tuesday’s price action created a new minor top at $64.72.

The major retracement zone is $62.05 to $58.91. This zone is controlling the longer-term direction of the market. Early Tuesday, the market found support at $62.11, slightly above the major Fibonacci level at $62.05.

Daily Technical Forecast

Based on the early price action and the current price at $62.68, the direction of the February WTI crude oil market into the close on Tuesday will be determined by trader reaction to the Fibonacci level at $62.05.

Bullish Scenario

A sustained move over $62.05 will indicate the presence of buyers. Overcoming a pair of Gann angles at $62.34 and $62.50 will indicate the buying is getting stronger. The first upside target is a minor 50% level at $63.42, followed by the minor top at $64.72.

Bearish Scenario

A sustained move under $62.05 will signal the presence of sellers. If this move creates enough downside momentum then look for a possible extension of the selling into the main bottom at $60.63.

The trend will change to down on a move through $60.63. This could trigger a further break into the major 50% level at $58.91, followed by a pair of uptrending Gann angles at $58.63 and $58.57.

This article was originally posted on FX Empire

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