Technical Outlook:

Sept Crude Oil: Price action was volatile on Wednesday with the session ending mixed as trade fell from the open below the 200 DMA at 7775 to 7590 before rallying back to close at 7699, down 51 cents. The near term outlook is Bearish on trade below the 200 DMA at 7775 in addition to failures ahead of the 8000 mark earlier this week. Trade above 7775 neutralizes Bear forces flipping the bias up to challenge upper listed targets.

Sellers can short rallies against 7699-7705 X Resistance and against 7735-7775 XX Resistance today. Failed rallies will reinforce the Bear bias. Trade below 7650 triggers renewed selling targeting 7600-7590 XX to 7550 XXX Support zones with the potential to see a washout to 7500-7450 XXXX.

On the upside, minor scalping can be done if the 7675-7650 X Support level is retested and holds. Any longs should be scaling out from 7700 to 7775 today. A punch through 7775 triggers follow through rallies to 7815-7850 XXX with a chance to extend to 7900 XXXX.

Monthly Chart:

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Weekly Chart:

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Bullish factors:

The main bullish factor is higher stocks, which have improved sentiment about fuel demand. Sep crude oil prices yesterday fell by 51 cents to add to Tuesday's $1.48 sell-off. Sep gasoline prices yesterday closed slightly higher by 0.06 cents.

Bearish factors:

(1) the DOE's weekly report that crude oil inventories rose sharply by 7.31 million barrels (2.1%), compared with the market consensus for a drop of 1.7 million bbl, and (2) yesterday's weaker-than-expected durable goods orders report, which added to the recent decline in consumer confidence to suggest that fuel demand may remain soft in coming months.

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