Crude Oil Inventories Are In, $50.00 On The Horizon

Posted Friday, January 4, 2019 by
Shain Vernier • 1 min read

WTI crude oil has posted a strong daily rally and is in position to test the $50.00 level in the near future. Intrasession bids hit the market consistently until the release of the EIA crude oil stocks report at 11:00 PM EST. Since that time, WTI has experienced a retracement and is attempting to post an intraday recovery.

Here is a look at this week’s holiday-delayed inventory cycle:

Event                                   Actual        Projected     Previous

API Crude Oil Stocks           -4.50M              NA             6.92M

EIA Crude Oil Stocks           0.007M         -3.086M     -0.046M

In short, the EIA number came in better than expected and up modestly from the previous release. However, the API reported a rather substantial draw on supply and an almost 10 million barrel week-over-week drop.

February WTI Crude Oil Futures

After a post-EIA rejection of daily topside resistance, February WTI crude oil futures are rotating near $48.00.

February WTI Crude Oil Futures (CL), Daily Chart
February WTI Crude Oil Futures (CL), Daily Chart

Here are the levels to watch as we roll toward the end of today’s session:

  • Resistance(1): Bollinger MP, $49.10
  • Resistance(2): Daily SMA, $50.51
  • Support(1): Psyche Level, $45.00

Overview: Throughout the week, I have talked extensively about the likelihood of WTI testing either $50.00 or $40.00 by weeks end. It looks like this prediction may fall flat, with today’s session high stalling at $49.22.

However, February WTI futures are in a strong position and may be poised to break the daily topside resistance levels early next week. If we see a rally above the Bollinger MP on Monday, then a test of $50.00 will come to pass very quickly. Should this scenario play out, it is a bullish early-year sign for WTI crude oil in 2019.

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