A bit earlier, the weekly EIA crude oil stocks report hit news wires. Supplies came in above projections, extending the seasonal trend of inventory growth. January WTI futures have shown modestly bearish participation since the release, falling beneath the $54.50 handle.

EIA Stocks Come In Strong

From a fundamental standpoint, there is little reason to maintain a bullish view of this market. Stocks are growing amid boosted North American shale production. Also, a price cut from Saudi Arabia appears to be driving the valuations of futures down. Don’t look now, but a test of $50.00 is more than likely imminent for the near future.

Here are the hard numbers from this week’s reports:

Event                                  Previous     Projected     Actual

API Crude Oil Stocks            8.790M            NA          -1.545M

EIA Crude Oil Stocks           10.270M       2.940M      4.851M

Today’s EIA stocks report has shown up well, almost doubling the projected figure. While the API number came in negative, traders typically place more emphasis on the EIA report. No matter which report one uses, the aggregate picture is growing supply in the wake of lagging global demand.

January WTI Crude Oil Futures

At press time, January WTI crude is compressed in a tight daily range just beneath the 38% retracement of Tuesday’s rout.

Here are the levels on my radar for the remainder of the session:

• Resistance(1): 38% Tuesday’s Range, $54.54
• Support(1): Psyche Level, $50.00

Overview: If you are trading WTI, be on the lookout for decreasing participation as today’s session wears on. Traders may be heading for the door early to get a jump on tomorrow’s Thanksgiving holiday. In the event that $54.54 holds firm as topside resistance, a run at Tuesday’s low may develop in the next several hours.