WTI OIL remains under pressure and could extend weakness on crude inventories surprise build
WTI oil is consolidating ion Wednesday after sharp over 3% fall the previous day. Oil price was under pressure on Tuesday on strong reversal signals and accelerated strongly lower after release of API weekly oil data showed unexpected and strong rise in oil inventories (6.5 million barrels vs forecasted draw of 2.2 million barrels).
Oil remains vulnerable for further fall as technical indicators show more room at the downside and speculation that EIA weekly supply data could surprise in showing large increase in US crude stocks (2.2 million barrels draw is forecasted for today) and positive figure would put oil prices under fresh pressure.
The price is for now holding above key support at $54.53 (Fibo 38.2% of $49.09/$57.90, reinforced by rising 20SMA) and firm break here would spark fresh extension lower for test of $54.02 (rising Kijun-sen) and 53.50 (50% retracement of $49.09/$57.90).
Meanwhile, limited upside is expected during current consolidation phase while broken 10SMA ($56.20) is expected to cap extended upticks.
Res: 55.25; 55.82; 56.20; 56.75
Sup: 54.80; 54.53; 54.02; 53.50