Commodity pricing has certainly rebounded today, led by gains in WTI crude oil. With the weekly inventory cycle rapidly approaching, September WTI crude futures are up over $1.00 per barrel on the session. Verbal sparring between Iran and U.S. has made headlines today, prompting fresh concern over the supply chain for the remainder of 2018. Subsequently, traders have bid WTI north of the $69.00 handle.

Inventories On Deck

Last week brought a surprise build in supply, as both the API and EIA stocks reports came in extremely positive. Many in the industry expect this trend to continue as North American shale producers and OPEC ramp up production.

Here are the expectations for this week’s oil inventories cycle:

• API Stocks: Last Tuesday brought an API stocks report of 0.629 million barrels. This number came as surprise to traders, well up from the previous week’s release.
• EIA Stocks:  The EIA crude oil stocks report from last Wednesday raised eyebrows throughout the energies sector. A build of 5.836 million barrels came in well above projections and the previous week’s 11 million barrel draw. Analysts expect stocks to come in at -3.167 million for tomorrow, returning to a negative figure.

Accurately predicting the outcome of the API and EIA releases is a monumental challenge. The hard data misses projections almost every week, with price action becoming chaotic in the aftermath. Buckle up and get ready for what is likely to be another wild crude inventories cycle.

WTI Crude Oil Technicals

The bulls have been in full control of September WTI crude today, driving price above the $69.00 handle.

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

• Resistance(1): Bollinger MP, $68.74
• Resistance(2): Daily SMA, $70.97
• Support(1): Macro 62% Retracement, $66.81

Overview: At press time, price is rotating just above the Bollinger MP at $69.00. This is not a bad area to be short, but with the API release on the horizon, things may get crazy ahead of today’s close. The best course of action is to keep risks small and evaluate the inventories cycle. Once the dust clears, we can then develop a more affordable plan to trade crude going into the late week.