U.S. West Texas Intermediate crude oil futures are trading slightly lower following the release of the latest U.S. Energy Information Administration’s (EIA) weekly inventories report for the week-ending March 22. The inside trading action suggests investor indecision and impending volatility. Gains are also being capped by concerns over the slowing global economy.
At 14:44 GMT, May WTI crude oil is trading $59.60, down $0.34 or -0.55%.
On Wednesday, a government report showed the nation’s crude oil stockpiles increased last week, but its fuel inventories fell.
Crude inventories rose by 2.8 million barrels in the last week, compared with analysts’ expectations for a decrease of 1.2 million barrels. Gasoline stocks fell by 2.9 million barrels, a slightly greater draw than the 2.8 million barrel forecast. Distillate stockpiles fell by 2.1 million barrels, versus expectations for an 896,000-barell drop, the EIA data showed.
Daily Technical Analysis
The main trend is up according to the daily swing chart. A trade through $60.39 will reaffirm the uptrend. The market is far from changing the main trend to down, but there is room for a near-tem correction into a retracement zone.
The minor trend is down, a move through $58.17 will reaffirm the downtrend.
The major 50% retracement level is $60.63. Holding above this level will continue to give the market an upside bias.
The main range is $54.87 to $60.39. If the selling pressure continues then look for it to possibly extend into its retracement zone at $57.63 to $56.98.
Daily Technical Forecast
Based on the early price action, the direction of the May WTI crude oil market is likely to be determined by trader reaction to the downtrending Gann angle at $59.39.
A sustained move over $59.39 will indicate the presence of buyers. This could create a labored rally with potential upside targets at $59.63, $59.89, $60.14 and $60.27. The latter is the last potential resistance level before the $60.39 main top.
A sustained move under $59.30 will signal the presence of sellers. This could lead to a break into the next uptrending Gann angle at $58.10.