Crude Oil has been struggling to break through overhead resistance, and late on Tuesday it got another push to the downside thanks to a surprise build in inventories
The API data on Tuesday showed a build of 5.59M barrels. Which was greater than the anticipated 2.794M draw that was on the cards.
The last few weeks have seen a real see-saw in terms of the builds and draws and the only thing that has been reasonably consistent is the relationship between the API and EIA data.
Now that we’ve had a build I suspect we are looking at the same thing with the EIA on Wednesday.
The Technical Picture
Oil was weak on Tuesday prior to the data, and the API just sent us lower. $70.00 now appears a little way off and price will have some work to do to test that area again.
The first upside target is $70.86, which is the high volume area.
We are still grinding our way up the trendline, so these pullbacks are just part of the game at the moment.
I do feel that we are relatively neutral at the moment from a fundamental point of view, despite the talk around of potential supply shortages.