Crude Oil was the big story on Monday after a big fall of more than 4%. The downside got a little bit heavier on Tuesday after we saw a surprise build in API inventories.

The API data is often seen as a semi-preview of what we might expect from the official EIA figure that is released on Wednesday.

The API number saw an increase in the number of oil stocks in the US of 0.629M. Which was far above the expected drawdown of 3.6M.

This might well have a flow-on effect as the European and US traders enter for the day. Especially given the fact that we are already starting to look bearish.

Bears in Control

On Tuesday, we were anticipating a potential bounce, given the hard sell-off and that didn’t come. Which can be a dangerous sign. And one that means we still have selling pressure.

I’m anticipating a move to $65 which is the major volume area. However, we will get a sharp response when price reaches $67. Yesterday we bounced off that level and it is the main interest to me at the moment.

We are either going to bounce off it again, or break straight through and hit $65, in my opinion.