Oil prices surged to $69.90 following a report of slump in US crude inventories. Moreover, the looming sanctions against Iran boosted sentiments of tightening supply.

As discussed in Sep 12 – Economic Event’s Brief, the EIA crude oil stockpile report is one of the most important economic events today. The inventories are expected to drop by -1.3M vs. -4.3M during the previous week.

But the thing is, the American Petroleum Institute (API) reported a drop of 8.6 million barrels in the week to September 7 to 395.9 million barrels. As we know, there’s a strong positive correlation between the API and EIA report. So, investors are likely to expect the same from EIA and are likely to continue to price in the sentiment.

Well, crude oil is also bullish as per the technical indicators. For instance, the WTI prices have crossed above the 50- periods EMA at $69.45. The same level is working as a support now.

So, all I’m gonna do is to look for a bullish enter above $69.45 to target $70.40 and $71.20, but that’s before the news. After the release of the news, the scenario can be totally opposite. So stay tuned to FX Leaders for more updates!