The word of the day is FED. In the lead up to the FOMC announcement at 2:00 PM EST, WTI crude oil futures are quiet. Of course, that is likely to change as we move into the close of the U.S. session.

EIA Inventories Release

Crude oil saw heavy action earlier today surrounding the EIA Stocks report. Inventories came in at -7.208 million barrels, way below the projected -2.629 million. The discrepancy only produced a moderate 39 tick one-minute pop to the bull. Within the half-hour, pricing quickly returned to the overnight value level.

1 Minute Rally On EIA Report

The lack of sustained buying is a bit of a shock given the dip in crude oil stocks. No directional move on an important fundamental number adds skepticism to the current daily uptrend.

Technicals

A 60-minute chart for September crude oil futures gives a good picture of how depressed price action has been today. Currently, we are trading inside of the 60-minute bar formed on the EIA release. So far, the market has been noncommittal above Tuesday’s high of 48.66. Buyer beware.

60 Minute Crude Oil-Session Outlook

However, price remains above 38% of Tuesday’s range. This is a big bullish sign for me, as it shows that the current daily uptrend has not yet been compromised. Compression at current levels going into the FED announcements is not a negative. The market is clearly in "wait and see" mode.

As we move into the close, things can turn on a dime. The key 38% level of Tuesday’s range provides a concrete stop out for anyone holding longs. If the price stays above $47.79 for the session, we are still on schedule to test $50.00 in the short-term.