October Crude Oil tested the 8 DMA early Tuesday morning, trading to 46.59 when a perfectly timed headline caused a rally to the high of the day at 48.32. With Crude Oil testing support Reuters reported an unnamed source stated that Iran was ready to cooperate with the rest of OPEC and stabilize crude oil production. Crude oil exploded off the lows before a denial from Iran stopped the carnage.
Price retreated from the high and traded down to 47.56 where it found support as the talking heads wouldn’t let go of the story. Price grinded higher and hung around the 48 handle and settled at 48.10. Crude Oil stayed in that area until the API report came out and sent price back to the mid day low, trading to 47.51 before ending the session at 47.57. The report showed overall crude oil inventories increasing by 4.464 million barrels, much higher than the drawdown of 850,000 barrels expected. Cushing, Oklahoma inventories rose by 417,000 barrels, a little more than the 200,000 barrel increase expected.
Gasoline and Distillates had drawdowns however, with gasoline supplies dropping by 2.2 million barrels and distillates by 834,000 barrels. We get the EIA report on Wednesday morning. Crude oil has trendline resistance up at 49.20 and then prior highs 50.54 and 51.67. Support is at 47.46 (8 DMA) and then the Monday low at 46.59. The 50 DMA is at 45.59and the 100 DMA is at 45.56. The 13 DMA is at 45.76.
High 48.32
Low 46.59
Last 47.57
Daily Pivot Points for 8/24/16
R2 49.22
R1 48.40
PIVOT 47.49
S1 46.67
S2 45.76