WTI oil price remains under strong pressure on Wednesday and attacks $46.04, base of narrowing daily cloud which contained Tuesday’s dip at $45.75.
The oil price fell sharply in past two days, showing no impact from hurricane Harvey which caused shutdowns of refineries and disruptions in supply, as strong concerns on global oversupply continue to weigh heavily on oil prices.
Tuesday’s close below $46.44 (former low of 17 Aug) was bearish signal, with price looking for close below daily cloud to confirm and trigger bearish extension towards next targets at $45.39/24 (24 July trough / Fibo 61.8% of $42.04/$50.41 rally).
EIA weekly crude inventories report will be released today with forecast for draw of 1.9 million barrels in the week ending August 25, compared to draw of 3.3 million barrels last week.
Release of API Crude stocks report on Tuesday showed draw of 5.7 million barrels, well above forecasted 1.5 million barrels draw which indicates that US oil market is starting to tighten.
Stronger than expected draw in oil inventories today may reduce the pace of recent bearish acceleration and generate initial recovery signal.
Narrowing daily cloud which is twisting early next week may attract for fresh recovery and support scenario. However, firm break above cloud is required neutralize bearish threats and shift near-term focus higher.
Res: 46.38, 46.70, 47.01, 47.38
Sup: 46.44, 45.80, 45.39, 45.24
