The WTI Crude Oil prices continue to consolidate in the wide trading range of $60.15 - $62.25. The prices slipped due to the anxiety that mounting US production could drive API inventories higher. The API report is expected during the US session, that's when I would be looking to take a position.
Quick Fundamentals Review
API Weekly Crude Oil Stock - At the moment, investors are focusing on the US API Weekly Crude Oil Stock which is due at 20:30 (GMT). Earlier today, I read on the news that volume from US oil fields (inclusive of shale) has increased by 22% since mid-2016 to 10.3 million barrels per day (BPD), highest since 1983. In February, the Oil production broke the threshold of 10 million BPD for the first time in the past 50 years.
Keeping this in mind, the API report is expected to show an increase in inventories and another round of selling during the US session. However, if the API report shows a decrease in inventories, it's going to be a surprise and we may drive dramatic bullish waves in the Crude Oil. Having said that, let me share the technical levels to follow.
Crude Oil is facing an immediate resistance at $61.50 and then $62.25. On 4-hour timeframe, the market is forming a descending triangle pattern and as we know, these patterns typically break downward. Yet, the API inventories will be a trendsetter.
WTI Crude Oil - 4 Hour Chart
Key Trading Level: 61.44
WTI Crude Oil - Trading Plan
Investors are advised to keep an eye on $61.50. Below this, Oil can target $60.25 while the breakage above $61.50 can lead the WTI towards $62.25.