Crude oil price has managed to move past $62 after failing to reach the level since its decline to 58 in mid-March. The surge is a reaction to the decline in US oil stockpiles. Stalled US-Iran nuclear talks have also supported the prices.
US Inventories Data
On Wednesday, the EIA confirmed the trend cited by API on Tuesday. According to the API, the weekly inventories fell by 3.608 million barrels; beating the estimated decline of 2.154 million barrels.
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EIA confirmed the trend by presenting a reading of -5.889 million barrels. The figure is better than the expected -2.889 million barrels, and an improvement from the prior week’s -3.522 million barrels. Furthermore, the gasoline inventories reading is at 0.309 million compared to the forecasted 0.786 million barrels.
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Stalled US-Iran Nuclear Talks
Crude oil price is also finding support from the hurdle in US-Iran talks on the nuclear deal. For the investors looking to trade oil, successful talks will result in lifting the current economic sanctions on Iran. With the country having the fourth-largest oil reserves in the world, the move would be negative for crude oil price. However, that may take a little longer after Iran indicated that it would heighten its uranium reserves to 60% to strengthen its position in the talks. This comes after the attack on its key nuclear plant.
Crude Oil Price Technical Outlook
Crude oil price is rallying for the third consecutive session. Over the course of the week, WTI futures have risen by close to 6%. On Wednesday, the benchmark for US oil was up by 2.86% at $62.17. On a two-hour chart, it is trading above the 25 and 50-day exponential moving averages.
Notably, the bulls have managed to push crude oil price past $62, which has been an important resistance level for close to a month now. After dropping from the 15-month high of $68 to $58 in mid-March, $62 has been a rather evasive mark. After gathering enough energy to hit and surge past this level, the bulls will now be targeting $64 before moving to last month’s high of $68. However, the price is likely to consolidate slightly at around $62 before resuming its rally.
However, this thesis will be invalidated if the price falls past the support level of $61. If that happens, the levels to watch out for are the psychological $60 and prior support level of $59.