WTI oil price is holding within tight range on Wednesday, showing a sign of indecision after Tuesday’s trading ended in long-legged Doji candle.
Mixed signal from daily studies shows no clear near-term direction. Daily Tenkan-sen / Kijun-sen bear cross weighs along with yesterday’s strong upside rejection at $48.19 and daily MA’s in bearish setup.
Negative momentum studies add to bearish signals.
On the other side, thick daily cloud continues to underpin (cloud top lies at $47.01) and marks significant support.
From the fundamental side, concerns of oil oversupply increase after gasoline inventories rose despite being at the peak of summer driving season (API report showed rise of 1.4 million barrels in gasoline stocks on Tuesday) and improved Libyan oil output continue to weigh on oil price, while trend in reduction of US crude stocks is likely to extend and supports oil prices (API report on
Tuesday showed draw of 3.6 million barrels while forecast for EIA report today shows forecast for 3.45 million barrels draw).
Break out of Tuesday’s range ($47.35/$48.19) would generate initial direction signal and expose key near-term points at $48.72 (Mon/Tue double upside rejection) or $47.01 (daily cloud top).
Res: 47.76, 47.90, 48.57, 48.72
Sup: 47.35, 47.01, 46.44, 46.22
