Whipsaw trading has defined today’s crude oil market. After an extremely positive inventory cycle, WTI crude has entered a consolidation phase. Tight conditions are the rule as market participants digest the stocks data.

Each extreme of the intraday range has been hotly contested. In fact, the 30-minute price bar during the EIA inventory release traded outside the session’s established high and low value. It appears that a late-day move is in the offing.

Inventory Stats

It has been an interesting inventory cycle. Here are the hard numbers:

• API stocks: +1.099 million barrels
• EIA inventories: +2.170 million barrels

The API stocks number came in two million barrels over last week and the EIA report blew forecasts away by four million barrels. As the week rolls on, we will see if these numbers drive the market south.

WTI Crude Oil Technicals

After trading under Tuesday’s low, June WTI crude has posted a moderate intraday rally. As of press time, this market has failed to pick a direction.

Here are the key levels to watch for the remainder of the session:

• Resistance(1): 38% Tuesday’s Range, $68.25
• Resistance(2): 78% Tuesday’s Range, $68.99
• Support(1): 20 Day EMA, $66.30

Bottom Line: The extremely positive inventories reports give reason to expect a rush of selling before week’s end. If this is the case, buys from downside support will come into play.

For the rest of today, it appears price is ready to fill in Tuesday’s range. Short scalps from just beneath the Fibonacci retracement levels are positive ways to take a few pips from today’s action. I have sell orders in queue from $68.24 and $68.98, looking for 8-12 ticks on a 1:1 risk vs reward ratio.