Oil Prices $1 Higher Approaching $70 as EIA Inventories Fall

Oil prices have been stable recently, trading around $70 for a few days as all markets await the Federal Reserve meeting later this evening. We are seeing a bounce off the support zone around $68.50s, after the EIA crude inventories showed a -1.63 million barrels decline, coming after a buildup in private A{PPI inventories.

Crude oil has been on a downward trend since August, dipping below $65 amid concerns about a global economic slowdown, especially with weaker GDP growth from China. However, last week saw a recovery above $70 as OPEC+ postponed its planned production increase for October and the Gulf of Mexico reduced output due to an approaching hurricane. Despite this rebound, buyers were unable to maintain momentum above the key $70 level, leading to a retreat and signaling that the bearish trend remains intact.

WTI Crude Oil Chart Daily – Consolidating In A $2 Range

Currently, the price is consolidating near this critical level as traders assess the next potential move. Crude oil is trading within a narrow $2 range, and for WTI to break its downtrend, it would need to move past immediate resistance at $70.50, potentially opening the door to further gains with the next resistance target at $72.60. On the other hand, a drop below $68.50 could lead to further declines, with $67.50 as the next major support and a possible test of previous lows.

The Weekly EIA Crude Inventory Report

• Crude oil inventories: Decreased by -1.63M barrels, significantly more than the expected -0.50M.
• Gasoline inventories: Slight increase of +0.069M barrels, below the estimate of +0.240M.
• Distillates inventories: Increased by +0.125M barrels, but below the expected +0.551M.
• Cushing inventories: Dropped by -1.979M barrels, compared to a decline of -1.704M last week.
• Refining utilization: Declined by -0.7%, slightly better than the expected -1.0%, following a previous decline of -0.5%.

The private inventory data yesterday showed a buildup of almost 2 million for crude, gasoline and distillates.

Private API Crude Oil Inventories

• Crude oil inventories +1.96M
• Gasoline inventories +2.34M
• Distillates inventories +2.3M
• Cushing +1.4M

US WTI Crude Oil Live Chart