May 18, 2022
  • May 18, 2022

WTI Crude Oil Falls After API Fail; Tap EIA Report

By on January 20, 2022 0

U.S. West Texas Intermediate crude oil futures fell on Thursday as investors posted profits ahead of the U.S. Energy Information Administration’s (EIA) weekly inventory report. Nevertheless, the market remains well supported by strong demand and short-term disruptions.

As of 0857 GMT, March WTI crude oil futures are trading at $85.19, down $0.61 or -0.71%. On Wednesday, the United States Oil Fund ETF (USO) settled at $61.08, up $0.11 or +0.18%.

Traders are bracing for a potentially volatile session on Thursday due to the EIA report and February futures contract expiration.

Bullish traders may have been encouraged to take profits after the American Petroleum Institute (API) report showed crude oil inventory build for the week ending Jan. 14 was lower than expected. The report came in at 1.404 million barrels against a pre-report estimate of 1.367 million barrels.

The API also reported an increase in gasoline inventories for the third consecutive week. The number stood at 3.463 million barrels for the week ending Jan. 14, on top of the previous week’s 10.86 million barrels.

Distillate stocks, however, saw their inventory decline by 1.179 million barrels for the week, following last week’s increase of 3.035 million barrels.

Today’s EIA report, due out at 1530 GMT, is expected to show crude oil inventories fell by 2.1 million barrels.

March Daily WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade at $86.79 will signal a resumption of the uptrend. A move to $74.01 will alter the main downtrend.

The minor trend is also up. A trade at $77.34 will change the minor downtrend. This will also shift the momentum down.

The minor range is $77.34 to $76.79. Its 50% level at $82.07 is the closest support level.

The second minor range is $74.01 to $86.79. Its pivot price at $80.40 is additional support.

Daily Swing Chart Technical Analysis

The direction of the March WTI crude oil market on Thursday will likely be determined by the reaction of traders at $85.76.

Downside scenario

A sustained move below $85.76 will indicate the presence of sellers. If this move creates enough short-term momentum, expect the sell-off to extend to the first pivot at $82.07.

Bullish scenario

A sustained move above $85.76 will signal the presence of buyers. If this move generates enough upward momentum, look for a rally to $86.79.

Pulling back $86.79 will indicate buying is gaining strength with the multi-year high at $88.18 the next likely target.