The 50 SMA has been broken in US WTI Oil

Oil Pushing Above at the 50 SMA After the Buildup in EIA Crude Inventories

Posted Wednesday, May 17, 2023 by
Skerdian Meta • 2 min read

The 50 SMA has been broken in US WTI Oil

Crude Oil has been bearish since the middle of April, with the global economy slowing down and heading toward a possible recession after numerous rate hikes by central banks all over the world. Although prices rose slightly today despite poor economic data from the US and China, as well as an unexpected rise in US crude oil inventories.

Yesterday, the market was not impressed by the retail sales and industrial production data from the US. Retail sales only increased by 1.6% last month, compared to 2.42% in the previous month. The industrial production data for April 2023 showed a growth of 0.24%, a significant drop from the 6.40% growth in April 2022. Additionally, the uncertainty surrounding the US debt ceiling increase also affected crude oil prices in the US.

The American Petroleum Institute (API) data yesterday showed that crude oil inventories increased by approximately 3.7 million barrels for last week, while the market had anticipated a decline in crude oil inventories during that period. Today’s EIA inventories showed a 5.04 million barrels increase although buyers didn’t mind the numbers and WTI crude is pushing above the 50 SMA (yellow) which comes at $72.

US Weekly Oil Inventory Report for Last Week

Crude oil inventories +5,040K vs -920K expected
Prior week inventories were +2,951K
Gasoline -1,381K vs -1,060K expected
Distillates +80K vs +57K expected
Refinery utilization +1.0% vs +0.5% exp
Production estimate 12.2mbpd vs 12.3 mbpd prior

The API data released late yesterday showed:

Crude +3690K
Gasoline -2460K
Distillates -886K
Cushing +2870K

WTI crude Oil was trading higher by 75-cents to $71.61 ahead of the data but this is a bearish release and it slipped about 20 cents lower after that release. Although, buyers came back again and sent the price more than $1 higher. We had a sell Oil signal here which we opened on Monday after the retrace higher, but it’s not looking good after this jump.