Oil price weakened about 3% on Wednesday after report from the US Energy Information Administration (EIA) showed that US oil inventories increased as well as OPEC’s oil production.
US crude oil inventories were up 14.4 million barrels at the week that ends at October 28, the biggest since 2008 by percentage.
Libya and Nigeria also increased their production. Until now, OPEC’s oil production has increased to 33.82 million barrels per day from 33.69 million barrels per day previously in September.
Investors will be watching oil price closely until OPEC’s next meeting in Vienna on November 30. OPEC is expected to confirm oil production limitation. Both OPEC and non-OPEC confirmed that the goal of the policy is to boost up oil price in 2017.
Intraday bias for oil remains bearish, moving way 20 MA and 50 MA on hourly chart – both MA are falling. Note that the price currently is testing intraday key resistance at 45.86-46.41. Hourly stochastics is overbought. CCI is still heading north but getting closer to the overbought area.
Today, I plan to look for sell signal confirmation on a pull-back move to within the resistance area with 45.51 as target and 44.95 in extension.
Be very careful if the price managed to break above 46.41 because it possibly will turn the intraday bias into bullish and oil price may rise to 46.76-47.32.
Trading Plan: Sell on bearish signal confirmation within 45.86-46.41; target at 45.51 or 44.95