Today during the early Asian session, WTI crude oil prices increased due to the release of weekly data that showed a drop in US crude oil inventories. A day before, the US crude oil surged over 0.7% to trade at $58.45.

WTI crude oil inventories declined by six million barrels during this week ended July 26 to 443 barrels, according to the forecast decrease of 2.6 million barrels, the report showed from the American Petroleum Institute.

One of the reasons behind the surge in prices is that traders await the expected rate cuts for the first time by the Federal Reserve in over 10 years. Federal Reserve is meeting today and is expected to cut its federal reserves rate cut to 2% to 2.25% on Wednesday. The rate is presently at 2.5%.

Dollar shares a negative correlation with commodities which is why weaker dollar sentiments are also supporting crude oil prices.

Support Resistance
55.16 57.46
54.11 58.7
51.82 61
Key Trading Level: 56.41

We may notice a slight drop in crude oil prices as investors are likely to sell off the overbought crude oil ahead of FOMC and Fed rate decision today. Therefore, I will be looking to stay bearish below 58.50 to target 58 and 57.75 today.

Alternatively, buying positions are suggested only above 58.55 today.

Good luck!