WTI testing bull's commitments at the pivot above 23.6% Fibo

• WTI remains above the pivot and 23.6 Fib.
• WTI weighed by production data, but must break pivot.

Oil prices have continued in their corrective decline on Wednesday following a U.S. government report that has revealed a weekly climb in U.S. crude production, along with a lofty weekly rise for gasoline stockpiles. WTI is currently trading at $52.11bbls, down from a high of $52.82bbls , off a low of $51.54bbls. 

EIA reported a larger-than-expected drop in crude inventories

While the Energy Information Administration, EIA, has reported a larger-than-expected drop in crude inventories, there was an upward adjustment to the domestic production number. That number is at 11.9 million barrels per day and inventories have shot up to circa six percent above the five-year average. 

The EIA reported that domestic crude supplies fell by 2.7 million barrels for the week ended Jan. 11. Despite the American Petroleum Institute reported a decline of 560,000 barrels, gasoline stockpiles were climbing by 7.5 million barrels last week, while distillate stockpiles up by 3 million barrels, according to the EIA - weighing on the price of oil. The S&P Global Platts survey had shown expectations for supply increases of 2.6 million barrels for gasoline and 900,000 barrels in distillates. 

WTI levels

• Support levels: 51.86 51.21 50.26 
• Resistance levels: 52.81 53.46 54.50

In choppy price action, the market is consolidating, although now leaning with a bearish bias on a technical basis, with 4hr MACD turning negative and RSI moving lower. However, the price remains above the pivot at 51.86. The price is also still above the 23.6% fibo retracement around 50.50. However, a break there should encourage additional speculative shorts as the bulls step aside. Bears can hunt down the psychological 50 figure and then 48.20 as a key confluence support area to target.