WTI bulls spiked up to test descending trendline resistance

West Texas Intermediate is down by 0.77% at the time of writing having travelled lower from a high of $57.10 to a low of $55.57 while oil futures also settled lower on Wednesday after the government reported a weekly decrease in domestic crude supplies. This data dropped in as the first in the past few weeks. WTI for October delivery dropped by 45 cents, or 0.8%, to settle at $55.68 a barrel on the New York Mercantile Exchange, 

The Energy Information Administration reports that U.S. crude supplies dropped by 2.7 million barrels for the week ended Aug. 16 following the builds of the prior two weeks. 

"The global supply narrative has continued to pump out a positive narrative, with the latest OPEC compliance data showing continued over-compliance, but demand fears continue to place a cap on the complex. This suggests that CTAs could be whipsawed for a while longer, as momentum signals prompt the algos to buy high and sell low, with prices largely remaining range-bound,"

analysts at TD Securities explained. 

WTI levels

The price continues to hold above the 20-daily moving average and pierced the 50-DMA, reaching the downside trendline.  On a reemergence of the bulls, which did manage a higher high and low on Tuesday and now Wednesday as well, there will be scope for a recovery to the 58 handle to meet trend line resistance. On the downside, bears can target a drop to the 52 handle and the 61.8% Fibo at 51.70 on the wide.