September Crude Oil made a new recent low on Tuesday, July 26, 2016, trading down to 42.36, a level not seen since April 20th. Crude broke through support at the 42.50 level but was able to find buyers from the low, spiking up to 43.19 and then ranging for the remainder of the day. Crude Oil was unable to find direction for the remainder of the session as traders awaited the upcoming API inventory report. With the breakdown in price since last week’s inventory numbers, traders became cautious and Crude Oil traded between 43.09 and 42.59 and settled the session at 42.92.
Trade was even tighter after settlement, trading between 43.01 and 42.78. The API inventory report showed crude oil inventories declining by 827,000 barrels, less than the 2 million barrel decline expected. Gasoline inventories had a small drawdown of 420,000 barrels and distillates increased by 292,000 barrels. The surprise for the report was the large build up of Cushing supplies. Cushing inventories increased by 1.4 million barrels, almost twice the 750,000 buildup expected. Don’t forget, Cushing is running out of space to store crude oil. On Wednesday we get the EIA report, and analysts are expecting a small build in crude oil and a small decrease in gasoline. With the new low in place, the downtrend continues and I think we have the potential to see support at 41.64 (the 50WMA) tested and then support at 40.95 (the 200DMA).
- High 43.39
- Low 42.36
- Last 42.64
Daily Pivot Points for 7/27/16
- R2 43.83
- R1 43.23
- PIVOT 42.80
- S1 42.20
- S2 41.77