U.S. West Texas Intermediate crude oil prices are little changed early Wednesday as record increases in COVID-19 infections in some U.S. states raised concerns about fuel demand in the world’s biggest crude user, erasing earlier gains that were driven by a surprise drop in U.S. crude inventories as reported by the American Petroleum Institute (API) late Tuesday.
At 07:09 GMT, September WTI crude oil is trading $41.17, up $0.13 or +0.32%.
Inventories of crude oil in the United States dropped by 6.8 million barrels last week to 531 million barrels, data from the API showed on Tuesday. Traders had priced in an increase of 357,000 barrels. Today’s U.S. Energy information Administration (EIA) weekly inventories report is expected to show a 1 million barrel increase.
Daily September WTI Crude Oil
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through $40.48 will change the main trend to down, while a move through $42.51 will signal a resumption of the uptrend.
The short-term range is $39.97 to $42.51. Its 50% level at $41.24 is acting like resistance, but the stronger resistance is the longer-term 50% level at $41.72.
Another short-term range is $37.32 to $42.51. If the main trend changes to down then its 50% level at $39.26 is likely to become the first objective.
Daily Swing Chart Technical Forecast
Based on the early price action and the current price at $41.17, the direction of the September WTI crude oil market on Wednesday is likely to be determined by trader reaction to the short-term pivot at $41.24.
A sustained move over $41.24 will indicate the presence of buyers. This could trigger a retest of $41.72. Sellers could come in on the first test of this level, but if it fails then look for a surge into the main top at $42.51. This is a potential trigger point for an acceleration to the upside.
A sustained move under $41.24 will signal the presence of sellers. This could lead to a test of the nearest main bottom at $40.48. Taking out this bottom will change the main trend to down with another main bottom at $39.97 the next likely downside target. If this level fails then look for the selling to possibly extend into the 50% level at $39.26.
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This article was originally posted on FX Empire