Oil prices experienced a significant decline earlier in the European session, with WTI dropping approximately $1.50. However, there was a sudden bullish reversal, leading to US Crude Oil rising more than $2. The drawdown in EIA crude inventories contributed to the reversal, causing crude oil to head toward $79 after bouncing off the 100-day Simple Moving Average (SMA).

Oil prices extended their decline this morning, marking a continuation of the volatility witnessed over the past week, which led to significant losses driven by fundamental factors affecting the broader market sentiment. Concerns about a potential economic slowdown as central banks and particularly the FED continue to keep interest rates very high, have cast uncertainty on global Oil demand.

Besides that, geopolitical tensions in the Middle East have eased as the possibility of a truce and ongoing negotiations mediated by international parties have emerged. The White House has indicated that discussions regarding potential arrangements for hostages in Gaza are ongoing, and there is optimism that the gap between the two sides may be closing.

This suggests that there is still hope for progress in resolving the situation. US officials have indicated that discussions regarding potential arrangements for talks between Israel and Palestine regarding the Gaza situation are ongoing, and there is optimism that the gap between the two sides may be closing. This suggests that there is still hope for progress in resolving the situation. However, there have been many attempts to find a resolution but they have failed, so Oil is ignoring such news at the moment.

WTI Crude Oil Chart Daily – Bouncing Off the 100 SMA

WTI crude made a new low early today, dipping just below $77, but it found support at the 100 SMA (green) on the daily chart, which stopped the decline. There was a bounce off this moving average which has sent WTI crude around $2 higher, but buyers will be facing the 200 SMA (purple) round $80, which would probably be a good place to open a long term sell Oil signal.

EIA (U.S. Energy Information Administration) Weekly Crude Oil Inventories and Derivatives

• Crude oil inventories experienced a significant drawdown of 1.362 million barrels, in line with expectations of a decrease but larger than the anticipated -1.066 million barrels.
• Gasoline inventories unexpectedly increased by 0.915 million barrels, contrary to the projected drawdown of -1.255 million barrels.
• Distillate inventories saw a buildup of 0.560 million barrels, deviating from the expected drawdown of -1.098 million barrels.
• Inventories at Cushing, Oklahoma, showed a notable build of 1.880 million barrels, compared to the previous week’s increase of 1.089 million barrels.

US WTI Crude Oil Live Chart