• US crude Oil has hit the upper resistance level three times since 19 July 2013.
• The commodity is currently trading at the support level of what it looks to be a triple top.
• While inventories of crude oil in USA have been decreasing they are still very high as highlighted by the EIA today.
• A break below 104.20 should confirm the triple top formation and push prices lower towards the 101.00 level.
• U.S. crude oil imports averaged about 8.0 million barrels per day last week, up by 34 thousand barrels per day from the previous week
• Over the last four weeks, crude oil imports averaged just under 8.0 million barrels per day, 501 thousand barrels per day below the same four-week period last year
• U.S. commercial crude oil inventories decreased by 1.4 million barrels from the previous week. At 359.1 million barrels, U.S. crude oil inventories are near the upper limit of the average range for this time of year.
A Triple Top is identified when the price form three peaks at nearly the same price level. The bounce off the resistance from the third peak is taken as an indication that buying interest is becoming exhausted. Traders typically set the price target at double the distance from the top of the middle peak.