Crude Oil Price Update – Testing Key Support Zone at $24.20 – $23.04 Ahead of EIA Report, OPEC Decision

James Hyerczyk

U.S. West Texas Intermediate crude oil futures are trading higher on Wednesday but basically treading water shortly after the regular session opening, and ahead of today’s Energy Information Administration weekly inventories report at 14:30 GMT, and Thursday’s major OPEC+ announcement.

Today’s EIA report is expected to show a 9.8 million barrel build. Gasoline stockpiles are also expected to spike higher with the numerous lockdowns in the United States curtailing driving activity and lowering demand. Traders are looking for a 5.4 million barrel build in gasoline stockpiles.

Late Tuesday, the American Petroleum Institute (API) reported an 11.9 million barrel build. Traders were looking for an 8.4 million barrel build during the week-ending April 3. Gasoline stockpiles jumped by almost 9.5 million barrels, while distillate inventories declined by 177,000 barrels.

At 13:52 GMT, May WTI crude oil futures are trading $24.87, up $1.24 or +5.25%.

Daily May WTI Crude Oil

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through $29.13 will signal a resumption of the uptrend. The main trend will change to down on a trade through the last main bottom at $19.27.

The short-term range is $19.27 to $29.13. Its retracement zone at $24.20 to $23.04 is potential support. The market is currently testing this zone. She the main trend is up, buyers could come in to defend this area. They are going to try to form a secondary higher bottom.

The main range is $36.70 to $19.27. Its retracement zone at $27.99 to $30.04 is the upside resistance target. It stopped the buying at $29.13 on April 3. This zone is controlling the near-term direction of the market.

Daily Technical Forecast

Based on the early price action and the current price at $24.87, the direction of the May WTI crude oil futures market the rest of the session on Wednesday is likely to be determined by trader reaction to the short-term 50% level at $24.20.

Bullish Scenario

A sustained move over $24.20 will indicate the presence of buyers. This could trigger a rally into a resistance cluster at $26.27 to $26.70.

Overtaking $26.70 will indicate the buying is getting stronger. This could trigger a rally into the main 50% level at $27.99, the minor top at $29.13 and the main Fibonacci level at $30.04. This is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under $24.20 will signal the presence of sellers. This could trigger a break into the short-term Fib level at $23.04 and an uptrending Gann angle at $22.77. The angle is a potential trigger point for an acceleration to the downside with the next target angle coming in at $21.02. This is the last potential support angle before the $19.27 main bottom.

This article was originally posted on FX Empire