The WTI Crude Oil Futures (NYMEX: CL) opened the Thursday trading session under pressure after the EIA supply report that the crude inventory for the week increased, helping the commodity’s bulls par off some of the spectacular gains of the previous session.
The EIA reported that the US crude oil inventories rose by 5.04 million barrels last week against the market expectations of a decline of 920 000 barrels. The increase in inventories threatened to rob the commodity of the 2.78% gains of the previous session. Oil had found buyers around the $70/BLL mark optimism around the US debt ceiling talks drove demand higher.
The 4H chart shows that the oil futures have formed a bearish symmetrical triangle pattern as the bulls try with little luck to recoup some of the recent losses. The pattern suggests a potential for the continuation of the selling pressure should the price action sustain a break below the dynamic support of the channel.
Thus, a short-term trading opportunity could exist as the price action breaks below the $69.56/BLL support level, with the $67.43/BLL acting as the next level of significance to the bears’ below. However, failure to sustainably break below the dynamic support would leave the dynamic resistance of the triangle in play.
The market sentiment around debt ceiling talks could continue to dictate the direction of oil prices in the near term. However, should the bearish sentiment around the commodity persists, trader reaction to the dynamic resistance could determine the direction of the oil futures on Thursday with a failure to break above the resistance, likely initiating a pullback towards the dynamic support.
Sources: TradingView, Reuters.
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