Crude oil prices had a volatile end to 2019. WTI crude oil CFDs opened at $61.66 and dropped to an intraday low of $60.63. The commodity bounced back up to re-test its daily open price but there were not enough bids for oil to close above its intraday resistance. By the end of the New York session, crude oil prices had settled at $61.21.
API Reports Fall in Inventories
The inventories report from the American Petroleum Institute (API) showed that in the week which ended on December 27, crude oil supplies fell by 7.8 million barrels. This figure may have helped crude oil prices bounce back up from its lows on Tuesday’s trading.
EIA Inventories Report Due Tomorrow
Tomorrow, it will the the Energy Information Administration’s (EIA) turn to release its data on crude oil inventories. At 4:00 pm GMT, it is expected that the government data would reveal a fall of 3.1 million barrels in oil supplies held in storage by commercial firms. A lower-than-expected number is typically bullish for crude oil prices because it hints that US demand for the commodity will soon pick up.
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Crude Oil Price Outlook
On the 4-hour chart, we can see that crude oil prices have fallen through support at the rising trend line (from connecting the lows of December 6, December 11, December 23, and December 30). Now, this could mean that sellers could be priming to move crude oil prices lower to around $60.24. This price provided the commodity with support on December 20 and aligns with the 100 SMA. If support at that price does not hold, the next near-term support is at $58.68 where the commodity consolidated from December 9 to 10.
It is worth noting, however, that thin trading volumes towards the end of 2019 may have cause the volatility we saw on crude oil prices. This means that the slide below the rising trend line does not necessarily reflect that there is enough selling pressure in the market. In fact, when you draw the Fibonacci retracement tool from the low of December 19 to the high of December 30, we can see that the commodity has found support at the 61.8% Fib level. If support at the $61.00 handle holds, we could see crude oil prices rally back up to its December highs at $62.35. If resistance at that level breaks, the next ceiling for the commodity to test will be at $63.32 where it made highs in September.
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