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Ebeling Heffernan Oil Report

Crude Oil prices fell below US$80 Wednesday as US inventories increased.
The US Energy Information Administration reported that the USA's Crude Oil supply rose by 3.7M bbls last week while gasoline supplies grew by 3.8M bbls.

Inventories of distillates, forecast to fall, rose by 1.4M bbls, as US demand for petroleum products fell by about 1% from last year. Crude Oil futures sank after the Report.

Light, Sweet Crude for February delivery was down US$1.14 to close at US$79.65 bbl on the New York Merc.

In London, Brent Crude for February delivery fell 99c to US$78.31 bbl on the ICE Futures Exchange.  

The Overall Technical Outlook: Nymex Crude Oil (NYSE:CL)
As reported prior, a short term top is in place in Crude Oil at 83.95, and the pull back from there is in progress now, and I expect it to extend further to as low as 79.63  in here.

For now, the intra-day bias remains on the Southside for a 38.2% retracement of 68.59 to 83.95 at 78.08 and below, but any downside should be contained by 61.8% retracement at 74.46 ,and then bring a rally resumption. A move above 81.98 will flip intra-day bias back to the Northside, and a further break of 83.95 will target upper trend-line resistance at 87/90 level once again.

The Big Picture: the break of the 82.0 resistance level confirms that the medium term rise from 33.2 has resumed, but here is no change in my POV that it is a correction in the fall from 147.27. So, I continue to look for a reversal signal as Crude Oil approaches its 50% retracement of 147.27 to 33.2 at 90.24, which is close to 90, a Key level. Having said that, a break of the 68.59 support level is needed to confirm that rise from 33.2 has completed. Sans that, the outlook will remain Neutral at worst even in case of deep pull back.  Stay tuned...Paul A. Ebeling, Jnr.

Disclosure: Long Oil