Oil was bullish in the fist half of this month, after a major gap at the start of April. WTI crude closed at $75.65 at the end of March, before OPEC+ announced a production cut for May through the end of this year, leading to the $5 gap higher at the beginning of April and eventually reaching $83.53 as buyers continued to push higher.

However, crude Oil has now fallen to $75.64 now, eventually closing the gap, with technical sellers following the textbook by selling into the gap as the price slipped lower. On the fundamental side, the recent trouble at First Republic Bank has renewed talk of a possible recession. Additionally, some recent economic indicators in the US have weakened, which has been weighing on the risk sentiment.

US WTI Oil Live Chart – The Gap Was Closed Today

Crude Oil has rebounded 100 pips higher after touching the low earlier 

After yesterday’s surprising decline in US crude inventories in the API report, Oil resumed the bearish momentum, although today’s drawdown on the EIA report didn’t have much impact on Oil prices. Instead, we saw a bounce off the bottom of the gap, and the previous H4 candlestick closed as a pin, which is a bullish reversing signal. Although Oil is starting to slide lower again now. The reductions in inventories are happening despite more SPR sales and ahead of the driving season.

The EIA Report

• US weekly EIA oil inventories -5,054K vs -1,486K expected
• Gasoline -2,408K vs -933K exp
• Distillates -576K vs -839K exp
• Refinery utilization +0.3% vs +0.3% exp

Yesterday’s API Crude Oil Reserves

• Crude Oil -6,083K
• Gasoline -1,919K
• Distillates +1,693K

US WTI Crude Oil Live Chart