Crude oil prices were little changed despite yesterday’s inventories report from the US. According to the Energy Information Administration (EIA), crude oil supplies held in storage by commercial firms had a draw of 2.5 million barrels. The forecast was for an oversupply of 400,000 barrels. Declines in inventories often have a bullish effect on crude oil price because they suggest that the demand for the commodity would soon pick-up. However, WTI crude oil CFD finished the day a mere 5 cents lower from its opening price at $58.07.
It’s worth noting that the technical setups of WTI crude oil look bullish. For instance, on the daily time frame, the commodity has formed a couple of reversal candlesticks at a critical support level. The $58.00 psychological handle where it is currently trading coincides with a rising trend line (from connecting the lows of October 3, October 10, and November 29). On top of that, the price also aligns with the 100 SMA and 200 SMA.
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The hourly time frame also shows that crude oil price seems to have broken resistance at a short-term falling trend line (from connecting the highs of January 8, January 10, January 14, and January 15). This could suggest that there may be enough buyers in the market who could push crude oil price to $64.00.
On the other hand, be wary of a bearish close below yesterday’s low at $57.30 because it would invalidate support at the trend line and SMAs. It may even suggest that crude oil price is on its way to $55.20 where it bottomed in November.