Both the API and EIA Weekly Inventory reports showed huge builds of 14 million barrels, which pummeled the price from $47.50 to $45 just since Tuesday evening -- after oil already had pressed from its Oct. 19 high at $51.93 beneath $50.
Oil is down nearly 14% during the last 10 trading sessions and as such, is extremely oversold as it continues to exhibit positive momentum divergences during the most recent Inventory-induced portion of the plunge from $47.50 to $45, which remains a warning signal that a vicious rebound could emerge at just about any moment.
However from a purely technical perspective, oil needs to claw its way back above $45.60/80 resistance, which will place the price structure once again above its Feb.-Nov. up trendline.
Unless and until oil reclaims its dominant support line, it will remain vulnerable to testing critical, pivotal September support lodged between $44 and $42.55.
