WTI: on the back-foot, awaiting the weekly inventory data from the American Petroleum Institute

WTI has been sliding its way in towards the API data today, falling from a high of 66.44 to 65.70.
WTI currently trades at 65.87 and battles with the 10-hr SMA located at 65.77, trading with a bearish bias despite the decline in the greenback where it has been otherwise negatively correlated to.
Investors will look to the weekly inventory data from the American Petroleum Institute.

Ross J Burland FXStreet

(Worth noting, in respect to the dollar and FX, the greenback has been stripped of its safe haven status and is currently looking into the depths of the 95 handle, having been sold off from within a range of between 95.0960-95.7520 today. 94.80 is the critical support that bulls will look to safeguard through the crosses as the euro and sterling hit up their 21-D SMAs and get back above their H&S necklines - (the Aussie is also through its 21-D SMA now looking in at the 50-D SMA)).

Meanwhile, staying with oil, Iran is the key story currently. Traders are looking to the U.S. sanctions against Iran for a further potential to disrupt global supplies and add tot he bid in the black gold - (U.S. sanctions on Iran specifically targeting oil are due to come into full force in November and industry experts estimate a loss of Iran oil supply would amount to 1 million to 1.5 million barrels a day). However, volatility could be on the cards in the price of oil given the price spread of more than $1bbls between the September and October contracts which is making for an ugly expiration today.

Investors will look to the weekly inventory data from the American Petroleum Institute

For the day ahead, investors will look to the weekly inventory data from the American Petroleum Institute later Tuesday and the U.S. government early tomorrow - (the EIA is expected to report a decline of about 3.4 million barrels in crude stocks and a weekly fall of 400,000 barrels in gasoline supplies - distillates expected to be seen up by 2 million bbls.

WTI levels

Crude oil WTI: Bulls in the starting blocks ready for a breakout past $67.00 a barrel

According to Flavio Tosti, analysts and editor at FXStreet, crude oil formed a triangle compression pattern with the 100-period simple moving average crossing above the 200-period simple moving average suggesting a bullish bias:

"Bulls are starting to break the triangle to the upside. Target 1 is located in the 66.30-66.53 zone and target 2 in the 67.16-67.72 area. A sustained bear breakout below 64.60 would negate the bullish bias."

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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