U.S. West Texas Intermediate crude oil futures are trading slightly higher on Wednesday. The move is catching most traders by surprise since it is coming after a potentially bearish American Petroleum Institute inventories report that showed a larger than expected build.
Gains continue to be limited, however, by concerns about increasing supply and a potential global economic slowdown that could lead to a drop in demand. At 1430 GMT, the U.S. Energy Information Administration is expected to announce a 3.6 million barrel inventory build for the week-ending October 26. Look for volatility.
The market is so short right now that a number less than the 3.6m could trigger a huge upside breakout.
At 1207 GMT, December WTI crude oil futures are trading $66.45, up $0.27 or +0.41%.
Daily Technical Analysis
The main trend is down according to the daily swing chart. A trade through $65.33 will indicate the selling is getting stronger. This could lead to a test of the August 16 main bottom at $63.48. A trade through this bottom will reaffirm the downtrend.
The market isn’t close to changing the main trend to up, but due to the prolonged move down in terms of price and time, it begins today’s session inside the window of time for a potentially bullish closing price reversal bottom.
The main range is $63.48 to $76.72. Its retracement zone at $68.54 to $70.10 is the primary upside target. At this time, this zone is acting like resistance.
Daily Technical Forecast
Based on the early price action, the direction of the December WTI crude oil market on Wednesday is likely to be determined by trader reaction to a pair of Gann angles at $66.72 and $66.79.
A sustained move under $66.72 will indicate the presence of sellers. If this creates enough downside momentum, we could see a break into the long-term uptrending Gann angle at $65.14. This is the last potential support angle before the $63.48 main bottom.
A sustained move over $66.79 will signal the presence of buyers. This would be the first bullish signal since the first week of the month. If it creates enough upside momentum then look for a potential spike into the Fibonacci level at $68.54.