On Wednesday, WTI crude oil prices bounced slightly after an abrupt fall from 59.50 to 56.30. The sell-off came in response to the OPEC and its allies’ decision to continue production cuts; however, the investors didn’t consider it enough to counter investors’ concerns about the slowing global economy.
Today, investors are looking to trade crude oil on the release of EIA report. Here’s what to expect.
API & EIA Inventories Report
The American Petroleum Institute (API) reported another huge crude stockpile draw of 5 million barrels, beating the analyst forecast of 2.484-million barrels draw last week.
During the previous week, the API reported a draw of 7.55-million barrels and a day later, the EIA reported that the US inventories had drawn down by a much larger 12.8 million barrels.
With that in mind, can we expect EIA to report another draw today? If yes, then is it going be more significant than 5 million? Well, a bigger than 5 million draw may help support oil prices. While a smaller draw may bring more sellers to crude oil.
Key Trading Level: 57.32
WTI Crude Oil – Trade Idea
I’m speculating that the inventory draw by 2.8 million barrels is already priced in and also it was comparatively very less than -12.8m barrels last week. Therefore, oil prices may drop on the release of the EIA report.
That being said, I will be looking to stay bullish above $56 to target $57.35 and $58 on the release of bigger than 5.5 million barrels’ draw in inventories. All the best!