WTI OIL stands at the back foot; awaiting EIA report for fresh direction signal
WTI oil trades lower on Thursday as strong rally in past three days showed signs of stall after hitting high at $51.40 (Fibo 61.8% of $52.84/$49.09 downleg).
The price came under pressure after release of API report which showed unexpected rise in crude stocks which rose by 3.1 million barrels and disappointed expectations for 0.4 million barrels draw.
Focus turns towards today’s EIA crude stocks report which shows forecast for 1.9 million barrels draw.
Today’s release in negative numbers could be supportive for oil price and prevent further fall.
Oil rallied strongly in past few days when WTI contract rose by 3.6% in three days on strong signals that oil market is rebalancing after being depressed by global oversupply.
Oil faces initial support at $50.72 (20 SMA) which contained yesterday’s dips and now acting as first pivot.
Daily Tenkan-sen ($50.39) marks next important support, close below which would generate stronger bearish signal on completion of reversal pattern on daily chart for retest of next pivot at psychological $50.00 support.
Alternatively, fresh strength and close above $51.40 would signal continuation of bull-leg from $49.09 towards $51.96 (Fibo 76.4%) and expose recent peak at $52.74.
Res: 51.11; 51.40; 51.96; 52.41
Sup: 50.72; 50.52; 50.39; 50.00