Explosive Rally In WTI Crude Oil Following Inventories
Shain Vernier • 1 min read
The oil markets are booming, led by a gain of more than $1.00 in October WTI crude futures. The last two sessions have brought a major breakout to the bull as traders are bidding everything in sight. At press time, October WTI is rotating near the $71.00 level, posting steep trends on intraday time frames.
Lagging inventories are the primary catalyst for the move north over the last 24 hours. I suspect that many traders agreed inventories were due to begin building with this week’s cycle. The complete opposite turned out to be true. Below is a quick look at the staggering API and EIA stocks reports:
- Tuesday’s API Crude Oil Stocks report came in at -8.636 million barrels, smashing the previous release of -1.200 million.
- Wednesday’s EIA Crude Oil Stocks number was -5.296 million barrels. This value smoked projections of -0.805 million and last week’s -4.302 million statistic.
October WTI Crude Oil Futures
In short, both stocks numbers shocked the markets, prompting rapid directional moves north in pricing. As of this writing, it appears the current swing high of $71.40 may come into play by day’s end.
Here are the numbers to watch for the remainder of the session:
- Resistance(1): Swing High, $71.40
- Resistance(2): Psyche Level, $71.50
Overview: It will not be a surprise if October crude challenges the Swing High at some point in today’s session. However, the value area established in the proximity of $70.00 will be a formidable adversary for WTI bulls. A return to this area from current levels is likely. In the event that we observe an exhaustion of the recent bullish pressure, a late-week position short may be in the cards.