It has been a tight week on the WTI crude oil markets. August futures have traded between $58.46 and $57.29, a meager range of 117 ticks. Since Sunday’s electronic open, energy traders have been noncommittal toward WTI in the runup to Wednesday’s FOMC Minutes and Powell’s congressional testimony.

Of course, it is Tuesday and that means the weekly oil inventories cycle is about to get underway. Last week brought a weak series of API (-5 million barrels) and EIA (-1.085 million barrels) figures. Analysts are projecting the EIA to extend the drawdown this week, projecting a -3.5 million barrel outflow, while estimates are not available for the API. 

No matter what the inventories numbers are, be ready for WTI to open up its weekly range in the near future. Given the coming economic calendar, August WTI is almost certain to test either $60.00 or $55.00 by Friday’s closing bell.

August WTI Crude In Heavy Rotation

August WTI crude futures are in heavy rotation in the $57.50 to $57.75 area. Traded volumes are significant, with more than 325,000 contracts having changed hands at the halfway point of the U.S. session.

Here are the key levels to watch going into this week’s inventory cycle:

• Resistance(1): Swing High, $60.28
• Support(1): 38% Current Wave Retracement, $56.73

Overview: On the daily time frame, WTI is holding firm in bullish territory. However, given the tight ranges and strong volumes, a breakout is highly likely in the coming 48 hours. Until we see the $56.73 level taken out decisively, a long-side bias is warranted.

So, bullish above $56.73, bearish below for August WTI crude oil futures.