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Crude Oil Price Update – Close Over $49.93 Keeps Market on Path Toward $53.60 Target

James Hyerczyk
·2 min read

U.S. West Texas Intermediate crude oil futures are trading higher late in the session on Wednesday. The market was underpinned from the start, rising to its highest level since late February, after Saudi Arabia announced a big voluntary production cut.

Buyers extended those gains after 15:30 GMT when the Energy Information Administration (EIA) said U.S. crude oil stockpiles fell sharply last week while fuel inventories rose.

At 19:22 GMT, February WTI crude oil settled at $50.76, up $0.83 or 1.66%.

Crude inventories fell by 8 million barrels in the week to January 1 to 485.5 million barrels, their biggest decline since August, exceeding analysts’ expectations in a Reuter poll for a 2.1 million-barrel drop.

U.S. gasoline stocks rose by 4.5 million barrels last week, the biggest increase since April, the EIA said, ahead of experience for a 1.5 million-barrel rise.

Distillate stockpiles, which include diesel and heating oil, rose by 6.4 million barrels, versus expectations for a 2.3 million-barrel rise.

Daily February WTI Crude Oil
Daily February WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier in the session when buyers took out the previous day’s high. The main trend will change to down on a trade through $47.18.

The first minor range is $47.18 to $50.94. Its 50% level at $49.06 is potential support.

The second minor range is $46.16 to $50.94. Its 50% level at $48.55 is additional support.

The major support is the long-term Fibonacci level at $46.04.

Daily Swing Chart Technical Forecast

The direction of the February WTI crude oil market into the close will be determined by trader reaction to $49.93.

Bullish Scenario

A sustained move over $49.93 will indicate the presence of buyers. If this creates enough upside momentum then buyers could take a run at the intraday high at $50.94. Taking out this level will keep the market on a path toward the February 20, 2020 main top at $53.60.

Bearish Scenario

A sustained move under $49.93 will signal the presence of sellers. This could trigger a late session break into a pair of 50% level at $49.06 and $48.55.

A close under $49.93 will form a potentially bearish closing price reversal top. If confirmed on Thursday, this could trigger the start of a 2 to 3 day correction.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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