Oil Price Faces Resistance Around $83, EIA Inventory Jumps

Oil prices have been increasing since early February, with WTI gaining $10, but it has found it hard to push above the 100 weekly SMA, which is acting as resistance. Yesterday the API private inventories showed a massive buildup of more than 9 million barrels, which didn’t help. Today the EIA inventories were expected to show a 700k drawdown.

WTI Crude Oil Chart Weekly – The 100 SMA Limiting Further Gains

On the weekly chart, we see that the 200 SMA (purple) was acting as support after the retreat in the autumn of last year, as the global economy was going through a weak period. The global economy is in a better position now and OPEC have postponed the production cuts, which has helped Oil prices move higher.

But the climb has stalled at the 100 SMA (green) which is acting as resistance on this timeframe chart and the stochastic indicator is overbought, which indicates a reversal lower. If this is the case, WTI crude should fall to $74 where the 200 SMA stands.

EIA Crude Oil Inventories

• EIA weekly US crude oil inventories +3165K vs -1275K expected
• Prior week inventory was -1952K
• Gasoline +1299K vs -1650K expected
• Distillates +518K vs +518K expected
• Production 13.1 mbpd vs 13.1 mbpd prior
• Implied mogas demand: 8.715Mbpd

API Private Crude Oil Inventories

• Headline crude inventories increased significantly by +9,337 million barrels, compared to an expected decrease of 1.3 million barrels.
• Distillates inventories increased by +531,000 barrels, while a decrease of 1.7 million barrels was anticipated.
• Gasoline inventories decreased by -4.437 million barrels, exceeding expectations for a modest increase of 0.5 million barrels.
• Cushing inventories increased by +2.392 million barrels.

This data point is from a privately conducted survey by the American Petroleum Institute (API).

WTI Crude Oil Live Chart