Crude Oil Price Update – Could Retest $46.04 After API Reports Unexpected 1.973 Million Barrel Build

U.S. West Texas Intermediate crude oil futures rose on Tuesday as traders focused on the rollout of COVID-19 vaccines and their potential positive impact on future demand instead of weak demand forecasts from OPEC and the IEA. Traders also looked past tightening lockdowns and restrictions in Asia, Europe and the United States.

At 21:47 GMT, February WTI crude oil futures are trading $47.75, up $0.60 or +1.27%.

American Petroleum Institute Weekly Storage Report

The API reported on late Tuesday a build in crude oil inventories of 1.973 million barrels for the week-ending December 11. Analysts had predicted an inventory draw of 1.937 million barrels for the week.

The API also reported a small build in gasoline inventories of 828,000 barrels of gasoline for the week-ending December 11 – compared to the previous week’s 6.442-millon-barrel build. Analysts had expected a 1.614-million-barrel build for the week.

Distillate inventories were up by 4.762 million barrels for the week, compared to last week’s 2.316-million barrel increase, while Cushing inventories fell this week by 165,000 barrels.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend resumed on Tuesday when buyers took out $47.88. The main trend will change to down on a move through $45.14.

The market remains on the strong side of a long-term retracement zone. The upper or Fibonacci level of that range at $46.04 is support. This price level was tested successfully on Monday.

Short-Term Outlook

A sustained move over $46.04 will generate an upside bias. Taking out Tuesday’s high at $47.89 will indicate the buying is getting stronger. If this move creates enough upside momentum then look for the rally to possible extend into the March 3 main top at $49.07.

A sustained move under $46.04 will signal the return of sellers. If this move creates enough downside momentum then look for a test of $45.14. Taking out this level will change the main trend to down.