The weekly U.S. oil inventory cycle is complete and supplies are on the build. However, May WTI crude futures are cutting into this week’s losses, up nearly $3.00 on the session. For the time being, it looks like the energy bulls have once again stepped in and bought a dip. Prices are north of $60.00 and may challenge Tuesday’s high ($61.35) by today’s close.
Due to the scheduled API and EIA inventories releases, late-Tuesday through Wednesday is typically an active time for WTI crude oil. Here’s a look at this week’s figures:
Event Actual Projected Previous
API Crude Oil Stocks 2.927M -0.900M -1.000M
EIA Crude Oil Stocks 1.912M -0.272M 2.396M
This round of numbers isn’t too alarming, although both outperformed expectations. Right now, it feels like nothing can derail oil prices for too long. Growing supplies and a resurgence of COVID-19 in Europe brought on a three-week downturn in WTI. Still, prices are driving above $60.00 as we head into the peak consumption months.
Today’s EIA report didn’t do much to discourage energy bulls. Bids continue to hit the market in mass, preserving the post-COVID WTI bull run.
EIA Supply Bump Does Little To Hamper WTI Rally
The weekly chart below is a look at May WTI as of Tuesday’s close. Since then, prices have jumped about $3 per barrel, reversing early-week woes.
Overview: As you can see from the chart above, March’s retracement in WTI has fallen just short of the key 38% Fibonacci retracement ($55.65). Post EIA report, bidders are back in control and a bullish bias is warranted. Barring an unexpected move on the U.S. COVID-19 lockdown front, this market is positioned to take out 2020’s high ($67.79) sooner rather than later.