West Texas Intermediate (WTI) extended its ongoing winning streak on Wednesday, increasing the price of crude oil to more than $51.50 a barrel amid US crude oil inventory news release. The technical bias remains bearish because of a lower low in the recent downside move.
As of this writing, the black gold is being traded around $51.56. A hurdle may be noted near $53.29 (an immediate trendline resistance) ahead of $53.68 (a cluster of two trendlines as marked with brown and black colors in the given below daily chart) and then $54.00, the psychological number. A break and daily closing above the $54.00 resistance shall trigger renewed buying interest, validating a move towards the $60.00 resistance zone in the medium term.
On the downside, a support may be seen around $51.21 a barrel (an immediate trendline support area) ahead of $49.81, the 50% fib level and then $47.09, a key horizontal support area. The technical bias shall remain bearish as long as the $54.00 resistance area is intact.
US Crude Oil Inventories
U.S. crude oil inventories fell a less-than-expected 1.5 million barrels to 512.9 million barrels at the end of last week, the American Petroleum Institute (API) said on Tuesday, while gasoline showed a bigger than expected drop along with distillates. Gasoline stocks fell by 3.15 million barrels and distillate inventories eased 1.85 million barrels. The figures will be followed by official data from the Energy Information Administration (EIA) on Wednesday. The API and EIA figures often diverge significantly.
Analysts expected crude inventories to drop by 2.733 million barrels, with distillates seen down 1.033 million barrels and gasoline stocks posting a 1.086 million barrels decline. The oil storage hub at Cushing, Oklahoma saw supplies drop by 210,000 barrels, the seventh straight weekly decline.
Considering the overall technical and fundamental outlook, buying crude oil around current levels can be a good strategy in short to medium term.