The lack of volatility in the market is just like a lull before the storm as most investors await US Advance NFP, BOC policy decision, and EIA stockpile report. No one seems ready to take positions ahead of these economic releases.
Speaking of the oil market, the movement in oil price is mostly flat on Tuesday as traders awaited the crude oil stockpile report from EIA (Energy Information Administration). Prior to the data release, the WTI future is trading around $55.95, outside the bullish channel.
The bearish breakout occurred after the American Petroleum Institute (API) reported a rise in the US crude oil inventories by 7.3 million barrels for the week ended March 1. This actually came as a surprise because the market was expecting a draw in inventories due to an extension in the US-China trade deal deadline.
USD – Crude Oil Inventories
The EIA (Energy Information Administration) is due to report on the WTI oil stockpile data. Last time, the inventories fell by -8.6M barrels, perhaps on the US-China trade deal sentiments.
Since the United States has already pushed the trade deal deadline and both nations are expected to meet at the March 27 summit, the sentiment for oil prices remains solid. We may see another draw in crude oil inventories this week.
WTI Crude Oil – Technical Outlook
The WTI crude oil technical outlook looks bearish below a significant resistance level of $56.20. At the moment, crude oil is supported above $55.66 and the support is extended by a double bottom pattern.
The bullish breakout of $56.50 can trigger buying until $57.45. While oil can stay bearish below $56.45 with a target of $55.