Bullish traders may have been encouraged to take profits after the American Petroleum Institute (API) report showed the crude oil inventory build for the week-ending January 14 came in lower than expected. The report came in at 1.404 million barrels versus a 1.367 million barrel pre-report estimate.
The API also reported a build in gasoline inventories for the third week in a row. The number came in at 3.463 million barrels for the week-ending January 14, on top of the previous week’s 10.86 million barrel build.
Distillate stocks, however, saw a decrease in inventory of 1.179 million barrels for the week, after last week’s 3.035 million barrel increase.
Today’s EIA report, due to be released at 15:30 GMT, is expected to show that crude oil inventories fell by 2.1 million barrels.
Daily Swing Chart Technical Analysis
The direction of the March WTI crude oil market on Thursday is likely to be determined by trader reaction to $85.76.
Bearish Scenario
A sustained move under $85.76 will indicate the presence of sellers. If this move creates enough short-term momentum then look for the selling to extend into the first pivot at $82.07.
Bullish Scenario
A sustained move over $85.76 will signal the presence of buyers. If this move generates enough upside momentum then look for a rally into $86.79.
Taking out $86.79 will indicate the buying is getting stronger with the multi-year high at $88.18 the next likely target.