Up $0.45 or 1.00%. What are the technicals saying?
Today the crude oil inventory date showed a big draw down of -7564K vs estimate of -2450K estimate. Sounds bullish right? Well it was seconds after the release. The price moved up to $46.48, but then started to come off and traded to a new session low at $45.11.
How come the price did not soar higher?
Toward the end of the day yesterday, the API estimate for inventories showed a -8100K draw down (a draw down higher than the one today). The price rose from $45.09 to above $45.62. That $45.62 level held the low until the fall back down after the data (yellow line on the chart above). The last few hours of trading has waffled above and below that $45.62 level. We are settling at $45.49, just below the level.
The draw down over the last few weeks have surprised, and perhaps the downside momentum has slowed for crude (the low stalled at $42 in June), but the markets are not all that convinced that the supply will still not be a problem down the road. Looking at the daily chart, there have been higher prices in July, but the prices still remain comfortably below both the 100 day MA (at $48.70) and the 200 day MA at $49.50. Ultimately, a move above those levels will give bulls more hopes for upside momentum.
