Crude oil price remains within a tight range even after the better-than-expected oil stockpile data. Profit-taking mode has contributed to the eased trading.
US oil inventory data
Late on Tuesday, the American Petroleum Institute (API) indicated that the amount of crude oil in storage dropped by 4.045 million barrels in the week ending on 27th August. The draw was higher than the prior week’s 1.622 million and the forecasted 2.833 million. However, sources indicate that gasoline stockpiles increased by 2.7 million barrels.
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Investors are now keen on whether EIA’s data, which is scheduled for release on Wednesday afternoon, will confirm the trend. Analysts expect a draw of 3.088 million barrels, which would be higher than the prior week’s 2.979 million. As for gasoline inventories, the forecasted decline of 1.633 million barrels is lesser than the previous 2.242 million.
Crude oil price has had a muted reaction to the better-than-expected oil inventory figures. WTI futures still lack enough bullish momentum to retest the crucial level of $70. At the same time, Brent futures is on a bearish consolidation pattern around $72 after dropping from $73.50 on Tuesday.
A look at both the fundamentals and technical point to a profit-taking mode. On Monday, WTI futures came close to $70 before pulling back. The rise was largely triggered by the Hurricane Ida, which is the fifth largest hurricane ever experienced on US mainland. With the ongoing restoration of operations, more investors likely took out their recent gains, hence the pullback in price.
WTI oil technical outlook
August has been a rather bad month for crude oil price. Since its onset, the benchmark for US oil -WTI futures – has dropped by about 7.20%. In the past week, it plunged to a three-month low at 61.74. While it has since rebounded, it lacks enough bullish momentum to reach the crucial resistance level of 70.
At the time of writing, crude oil price was up by 0.09% at 68.58. Since the beginning of the week, the commodity has been trading sideways around 68.50. On a four-hour chart, it is trading slightly above the 25 and 50-day exponential moving averages.
In the near term, WTI oil will likely continue to find support along the 25-day EMA at 68.23. As a reaction to the US stockpile data, it may rise to the week’s high at 69.61. Additional bullish momentum may push it further to the psychological level of 70, where it will likely experience some resistance. However, this thesis will be invalidated by a move below the 50-day EMA at 67.68.
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