Massive Build In EIA Crude Oil Stocks

The weekly crude oil inventory cycle is complete and supplies are on the rise. Both Tuesday’s API report and this morning’s EIA release showed dramatic builds in stocks. Subsequently, WTI crude oil pricing is stagnating, in a non-committal technical area on the daily time frame.

EIA Crude Oil Stocks Report Outperforms Expectations

The recent trend in crude oil is growing supply. This week followed this tendency to a tee, with inventories posting significant growth. Here is a quick look at the data:

Event                                             Actual        Projected     Previous

API Weekly Crude Oil Stocks       6.81M               NA             6.90M

EIA Weekly Crude Oil Stocks      9.934M          2.093M       5.479M

While the API is down a bit week-over-week, the EIA statistic has increased by almost 4.5 million barrels. Both of these figures are seasonally strong and are putting a short-term ceiling on WTI prices. In the event significant builds become normal for May, modest oil pricing will be likely going into the summer months of June, July, and August.

June WTI Crude Oil Futures Consolidate Near $63.00

Over the past three sessions, June WTI crude oil futures have consolidated between $62.50 and $64.75. At press time (11:30 AM EST), WTI is trading in a noncommittal technical area on the daily chart.

Here are the levels to watch as today’s session unfolds:

• Resistance(1): Bollinger MP, $63.20
• Resistance(2): Daily SMA, $63.53

Overview: The zone between $63.50 and $62.50 has been hotly contested throughout the trading week. It appears that June WTI futures are gearing up for a directional move. So, which way is price headed?

In the long-term, the uptrend remains valid and seasonal buying pressure is a fundamental worth noting. However, price cannot seem to gain any bullish traction and remains in the vicinity of last week’s low ($62.28). If we see June WTI break beneath this level, then a run to $60.00 may be in the cards. If not, be on the lookout for a rally above daily resistance and strength toward $65.00. Either way, WTI is primed for a late-week breakout to the bull or bear.