Oil continues to grind higher, closing in on the psychological barrier of $50.00. As it stands, oil is poised to close a winner for the 4th consecutive day.

Today’s trading of September WTI Crude Oil futures has extended gains to an intrasession high of $49.19. September crude hasn’t traded north of $49.00 since June 1st.

Yesterday’s weak EIA inventory report shocked analysts but did little to bolster intrasession pricing. Today traders have been free to value the report in earnest without a looming FED announcement to alter their open positions.

Getting Hot

Over the past week, oil has begun to resemble its old self. Posting a weekly gain of $3.10 per barrel, buyers have entered the market in force. Tuesday’s trading range of 228 ticks marked the largest in over two weeks.

Daily Crude Oil Chart

Volumes for September WTI crude have been huge, averaging more than 600,000 contracts per session. With so much action, I am inclined to think that this market is going to test $50.00 in short order.

Not everything in trading is an enigma wrapped in a quandary. Sometimes analysis can be fairly routine. Until proven otherwise, being long is the play.

Today’s low at the close will give us a good idea of where bulls will be jumping out of the trade tomorrow. If we trade under today’s low in Friday’s overnight or U.S. session, then a period of compression may ensue. At that point, it will be time to reevaluate.