Roller coaster ride in WTI – calls updated

Today's weekly inventory report is turning out to be make or break event for WTI benchmark as it is testing key interim support at $43.3/barrel. WTI is currently trading around $43.5/barrel area.

For the past five days, Crude oil has been in roller coaster ride of ups and down both intraday and daily basis. The detailed move is shown in figure, today could be another such day of high volatility once this week's inventory report is taken care of.

As shown in chart,

• Last Thursday WTI rose by more than 10.3%.
• On Friday it rose by another 6.3%.
• The rally extended on Monday as prices moved up by another 8.8%

As Price closed to $50/barrel, seller took advantage of key level and pushed crude down.

• WTI dropped by -7.7% on Tuesday.
• Today WTI is down about -2.1% so far as traders await key data from EIA.

Trade idea 

• In the short term we have given call to long crude around $45/barrel area targeting $53/barrel area with stop around $39/barrel.

Though volatility clearly poses challenge as the call is against current fundamental of supply surplus, there is still no basis or levels to exit the trade.

Key support lies around $43.3/barrel and $41.5/barrel.