WTI Crude Oil Trades Beneath Double Top – Can EIA Report Trigger a Breakout?
Arslan Butt • 1 min read
Crude oil is trading slightly bullish at $51.85, supported by China’s proposal to introduce policies to support a slowing economy. The market is trading crude oil
On Tuesday, China’s National Development and Reform Commission gave support to crude oil prices when they spoke about adding more fiscal stimulus.
As per the American Petroleum Institute (API) stockpile report, Oil inventories fell by 650K barrels for the week ending January 11, which is way less than the forecast of 2.5 million barrels draw.
EIA Inventories Report
We have an EIA report today at 15:30 (GMT). Economists are expecting a draw of -1.4 million barrels in crude oil inventories which is sort of bullish. However, it’s less bullish than -1.7 million draws during the previous week.
Since the EIA report is positively correlated with API, the market will be trading crude oil with a bullish sentiment. The bias is bearish beneath the $52.30. The tweezer top pattern could send prices down towards $50.50 today.
WTI Crude Oil – Trade Idea
I’m speculating that the -1.4 million bpd is already priced in. Therefore, the oil prices may drop on the release of the EIA report. That said, I will be looking to stay bearish below $52 to target $51.60 before the release of news today.
All the best and stay tuned for updates.