U.S. crude oil continues to trade bullish despite an unexpected rise in crude oil inventories last week. What’s going on here and what can we expect from crude oil now? Let’s find out…
WTI Crude Oil – Fundamental Outlook
On Wednesday, the EIA (Energy Information Administration) reported a build of a 2.2m barrel vs. a previous draw of 1.1m and a forecast of a 1.6m draw. As I explained in my previous update, WTI Crude Oil Gains Support above 67.50, there’s a positive correlation between the EIA and API reports. On Tuesday, the API (American Petroleum Institute) reported a build of 1.099m barrels vs a previous draw of 1.047m. Having said this, the rise in crude oil inventories was already priced in and the market reversed back after a slight dip to $67.25.
WTI Crude Oil – Technical Outlook
At the moment, crude oil is trading above the 50% Fibonacci retracement level which is supporting this commodity above $67.25. This level is important because the 50-period exponential moving average is also supporting this price zone.
Overall, oil prices are playing in a choppy range with an upper limit of $69.45 and a lower limit of $67.25. So, the idea is to go with the flow. It will be nice to stay bearish below $69.50 while remaining bullish around $67.50. Good luck!