WTI Crude Oil Update: This Week’s Inventory Cycle In Focus

Today’s session has produced a bullish breakout for November WTI crude oil futures. Concerted buying over Monday’s high of $49.79 has driven price north of $50.50 on heavy volumes. It seems like anytime there an inside session as Monday was, we see a breakout from the established extremes.

It is inventory time again, so don’t forget these upcoming data releases. The time of the EIA number has been adjusted in accordance with Monday’s observance of Columbus Day.

• API Crude Oil Stocks:              Today, 4:30 PM EST

• EIA Crude Oil Inventories:       Thursday, 11:00 AM EST

As always, these reports generate massive participation. Be sure to have a risk management strategy in place if active in the market during these times.

Technicals

November WTI crude futures have broken through our established resistance zone. Nonetheless, crude is trading in a make-or-break area for the intermediate term.

November WTI Crude Oil Futures, Daily Chart

Crude oil is always interesting as we approach the inventory data releases. For now, here are the key support and resistance levels:

• Resistance at the Daily SMA $50.60

• Resistance at the 38% retracement from Sept. high to October low at $50.54

• Support from the 20 Day EMA at $50.25

• Support from the Bollinger MP at $50.13

It appears as though the $50.50 and $50.00 levels are the linchpins in this week’s trade. If we see a definitive break above the SMA at $50.60, then a run towards $52.86 may be in order.

Bottom Line: Today’s closing range will set up favorable trades as we move into the middle of the week. While it is possible to short the resistance levels, the bulls are currently running the show. For now, waiting for the dust to clear going into the API stocks release is the best course of action.

In the meantime, be sure to check the FX Leaders signals page for trade ideas facing a broad collection of asset classes.