U.S. West Texas Intermediate crude oil futures are trading higher at the mid-session after trading flat shortly after the opening. The market was supported earlier in the session by Tuesday’s bigger-than-expected drop in crude oil and gasoline inventories as reported by the American Petroleum institute (API).
Prices rose shortly after the regular session opening in reaction to higher than expected U.S. consumer inflation numbers, but traders showed little reaction to the government inventories numbers, which essentially reaffirmed the API data.
U.S. consumer inflation and core consumer inflation reportedly rose 0.6%, both beating the forecast. Meanwhile, according to the Energy Information Administration (EIA), crude inventories fell by 4.5 million barrels in the week-ending August 7 to 514.1 million barrels, compared with analysts’ expectations for a 2.9 million-barrel decline.
U.S. gasoline stocks fell by 700,000 barrels to 247.08 million barrels, the EIA said, compared with analysts’ expectations for a 0.7 million-barrel decline. Distillate stockpiles, which include diesel and heating oil, fell by 2.3 million barrels to 177.66 million barrels, versus expectations for a 0.4 million-barrel rise, the EIA data showed.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through $43.52 will signal a resumption of the uptrend. The main trend will change to down on a move through the nearest swing bottom at $38.72.
The minor trend is also up. A trade through $41.06 will change the main trend to down. This will also shift momentum to the downside.
The minor range is $43.52 to $41.06. Its 50% level at $42.29 is new support.
The major support remains the long-term 50% level at $41.72.
The short-term range is $38.72 to $43.52. Its 50% level at $41.12 is also support. It essentially stopped the selling at $41.06 on August 7.
The key level to watch is the long-term 50% price at $41.72. Holding above this level will signal the presence of strong buyers. If traders can create a support base above this level then eventually it should create the upside momentum needed to challenge the Fibonacci level at $46.37.
Even if there is a struggle at $41.72, there is still backup support at $41.12.
Holding above the minor pivot at $42.29 into the close today will also indicate the presence of strong buyers.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire