By Richard Rittorno
The spot price for WTI Crude Oil (NYSEARCA:USO) futures tumbled Tuesday to a two week low with an intraday low of $100.37 a barrel. Market participants are in a holding pattern ahead of the Wednesday's weekly supply data report scheduled for 10:30 am Wednesday.
The price of WTI has been trading within an acceding wedge until breaking out below the wedge this morning. Support on the daily chart is found at July 15 low of $99.01.
Expectations for the Energy Information Administration report are for 400k to 1 million drop in storage supplies. Anything less will be seen as bearish demand for the largest oil consumer.
Speculation on the street is for a significant drop in storage after extremely economic bullish news concerning U.S. consumer. This morning the July Consumer Confidence report indicated an increase of consumer confidence with a reading of 90.9 compare to last month's 86.4. Expectations were for decline to 85.3.
Market participants are likely to remain cautious in the energy patch as their focus will now be on the Federal Reserve's policy meeting that began today with a the wrap up of the FOMC Statement and Federal Fund Rate decision set for 2pm tomorrow.
Expectations are for the FOMC to maintain its tapering plan with another reduction of $10 billion bringing down the total bond purchasing program to $25 billion per month.
Bottom Line: Pressure is likely to remain on the space as we head into the inventory report and the Fed decision all the while traders will be keeping an eye on decision from the euro zone to increase sanctions on Russia.