WTI Above $57.00 Pending Inventories

It appears that the spring bidding season has kicked off for WTI crude oil. Prices are holding firm in the $57.00 area as institutional investors eagerly anticipate the increased consumer demand of the coming months. When coupled with seasonal builds in winter supply decreasing, April WTI futures are in position to test $60.00 in the near future.

Oil Inventories Coming Up…

Later this afternoon, the weekly oil inventory cycle begins with the API stocks report. Here is a look at the expectations for this week’s numbers:

Event                                           Previous   Projected

API Crude Oil Stocks                      7.29M         NA

EIA Crude Oil Stocks                      7.069M    2.861M

Last week brought healthy builds in supply, with both the API and EIA figures coming in north of 7 million barrels. This week will likely be a very different ballgame. Consensus expectations suggest these releases will come in much lighter than last week. If so, April WTI futures may get the much-anticipated bump to $60.00.

April WTI Crude Oil Futures

Earlier in the session, April WTI futures posted highs north of $57.55. Although a bit short of the double-top pattern on the daily chart, sellers stepped in and checked the bullish action hard.

Bottom Line: Until elected, I will have sell orders queued up from the double-top at $57.84. With an initial stop at $58.01, this trade produces a tight 15 ticks on a sub 1:1 risk vs reward management plan.

In the event that this week’s numbers come in unexpectedly light, be on the lookout for a quick break toward $60.00 in coming sessions. There isn’t much resistance above $58.00 ― tight inventories may be the catalyst for a quick rally the $60.00 handle.