WTI Oil: Surprise API draw saved the day for the bulls

• The American Petroleum Institute (API) reported a surprise draw in inventories yesterday, helping WTI regain some poise. 
• Prices are still trading below the inverse head-and-shoulders neckline. So bulls are not out of the woods yet. 

WTI crude oil is currently trading at $56 per barrel, having picked up a bid at a low of $55.05 yesterday, possibly due to an upbeat US inventory report. 

The American Petroleum Institute (API) reported a surprise draw in crude oil inventory of 4.2 million barrels for the week ending February 22, as opposed to the consensus estimate of 2.842 million barrels. 

The surprise draw saved the day for bulls, as prices looked set for a deeper drop following Monday's 3 percent drop, which invalidated the inverse head-and-shoulders breakout confirmed on Feb. 20. 

That said, WTI is not out of the woods yet, as prices are still trading below the inverse head-and-shoulders neckline of $56.19. 

Further, a break above $57.79 (Feb. 22 high) is needed to revive the bullish outlook. That breakout may happen if the US weekly inventory report shows a big draw in inventories and the risk appetite improves. 

Technical Levels