Crude Oil Price Update — Plenty of Room to Upside if EIA Delivers Bullish Crude Inventory News

U.S. West Texas Intermediate crude oil futures are trading higher on Wednesday in anticipation of a large crude oil inventory draw in today’s U.S. Energy Information Administration’s (EIA) weekly inventories report, due to be released at 14:30 GMT.

After the American Petroleum Institute (API) reported a large draw late Tuesday, traders adjusted their forecast for the EIA’s report and are now predicting a 2.4 million barrel draw, up from a 400K draw earlier in the week.

At 11:40 GMT, the October WTI crude oil futures contract is trading $94.47, up $0.73 or +0.78%. On Tuesday, the United States Oil Fund ETF (USO) settled at $76.84, up $2.16 or +2.89%.

In anticipation of the potentially bullish inventories report, traders are shrugging off reports that OPEC+ may delay its planned production cuts, floated around on Monday, and rumors that Iran is close to signing the Nuclear Deal that would bring more oil supply into the market.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up on Tuesday when buyers took out the last main top at $94.17. A trade through $85.37 will change the main trend to down.

The short-term range is $99.75 to $85.37. The market is currently trading on the weak side of its retracement zone at $94.26 to $92.56, making the area support.

The key upside target area is $100.41 to $103.95 and the major support zone is $88.26 to $81.85.

Daily Swing Chart Technical Forecast

Trader reaction to the short-term Fibonacci level at $94.26 is likely to determine the direction of the October WTI crude oil futures market on Wednesday.

Bullish Scenario

A sustained move over $94.26 will indicate the presence of buyers. If this move creates enough upside momentum then look for a potential acceleration to the upside with the next major target being $99.75 to $100.41.

Bearish Scenario

Consolidation below $94.26 will signal the presence of sellers. The first downside target is the minor 50% level at $92.56. This is a potential trigger point for an acceleration to the downside with $88.26 a potential near-term target.