WTI OIL – Crude stocks data eyed for fresh signal
WTI oil price holds firm tone on Wednesday but stays below new high at $64.87, posted on 15 Jan and retested on Tuesday, but gains were limited here.
Surprise increase in US crude inventories (API report on Tuesday showed build of crude stocks by 4.8 million barrels, the first increase in ten weeks) slowed bulls. Limited dip was seen after data (easing was contained at $64.30) with subsequent acceleration higher, turning near-term bias higher again.
Bullish techs continue to underpin oil price, along with positive sentiment on OPEC-led production cut action which managed to reduce impact of global oversupply and boost oil prices.
EIA weekly crude stocks data are in focus today, with forecast for 1 million barrels draw, compared to draw of 6.86 million barrels last week.
Markets are concerned about possible increase in crude stocks which could have negative impact on near-term price action.
Bulls need firm break above $64.87 barriers to signal bullish continuation and expose next target at $66.75 (50% retracement of $107.45/$26.04 descend).
Negative scenario would signal increasing downside risk on break below initial support at $64.08 (rising 10SMA) and would signal extended consolidation.
Near-term action is holding within $64.87/$62.80 range with break below $62.80 handle (correction low / rising 20SMA) needed to generate stronger signal of correction.
Res: 64.87; 65.00; 65.35; 65.65
Sup: 64.32; 64.08; 63.69; 62.80