U.S. West Texas Intermediate crude oil futures are inching higher shortly after the regular session opening on Tuesday. The move is likely being fueled by short-covering, following yesterday’s plunge as traders pared losses as tropical storm Beta lost strength near the west coast of the Gulf of Mexico. Gains are being capped as worries about fuel demand persisted with flare-ups around the globe in coronavirus cases.
At 13:00 GMT, December WTI crude oil is trading $40.14, up $0.29 or +0.73%.
The key report today occurs late in the session at 20:30 GMT. The American Petroleum Institute (API) is expected to report that U.S. crude oil and gasoline stockpiles likely fell last week, while inventories of distillates, including diesel, were seen climbing, a preliminary Reuters poll showed.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. However, momentum has been trending higher since the confirmation of last week’s closing price reversal bottom on September 9.
A trade through $37.11 will signal a resumption of the downtrend. The main trend will change to up on a move through the last main top at $44.33.
The minor trend is also down. A trade through $42.02 will change the minor trend to up. This will be further confirmation of the shift in momentum to up.
The short-term range is $37.11 to $42.02. Its retracement zone at $39.57 to $38.99 is potential support. This area stopped the selling at $39.21 on Monday.
The main range is $44.33 to $37.11. Its retracement zone at $40.72 to $41.57 is resistance. This area essentially stopped the rally last week.
Daily Swing Chart Technical Forecast
The market is currently trading inside a pair of 50% levels at $39.57 and $40.72. Trader reaction to this levels should determine the direction of the market on Tuesday.
Since the main trend is down, sellers are likely to come in on the first test of $40.72. However, overcoming this level could trigger a surge into the Fibonacci level at $41.57, followed by the minor top at $42.02.
A failure at $39.57 will signal the presence of sellers. This could trigger a break into the Fibonacci level at $38.99. This level is a potential trigger point for an acceleration to the downside.