Crude oil price is finding support as the market reacts to the differing US inventories data from API and EIA. Late on Tuesday, API indicated that the weekly stockpiles dropped by 2.533 million barrels compared to the forecasted fall of 2.250 million barrels. While the figure was lower than the prior week’s decline of 7.688 million barrels, it acted as a bullish catalyst.
However, according to EIA, the weekly oil inventories missed the estimates after falling by 0.427 million barrels compared to the predicted reading of -2.817 million barrels. At the same time, gasoline inventories rose by 0.38 million barrels. Analysts had expected the stockpiles to drop by 0.600 million barrels.
The higher-than-expected inventories seem to substantiate OPEC’s position. In its monthly report, the coalition of oil-producing countries left its forecast of global oil demand unchanged at 3.5% below the pre-pandemic levels. This equates to about 96.5 million bpd. The position is founded on uncertainties as the coronavirus pandemic continues to ravage the third largest oil consumer – India.
On the supply side, oil producers outside the cartel are expected to record reduced production by 200,000 bpd to 700,000 bpd. In the US, OPEC noted that output within the country’s shale industry has been slow to recovery.
WTI Oil Technical Outlook
Crude oil price is trading lower as a reaction to the US inventories data. After hitting an intraday high of $66.60, which was a one-week high, WTI futures are now at $65.97. In the previous session, the prices dropped to an intraday low of $63.68 after OPEC left its estimates unchanged in its monthly report.
On an hourly chart, crude oil price is trading above the 14 and 28-day exponential moving averages. Interestingly, the pattern in today’s session is somewhat similar to that of 5th May when the market was reacting to the weekly US oil inventories. If a similar trend occurs, the next target may be at $65. At that support level, it may bounce part to $66. Subsequently, it will experience some resistance at that point before targeting the higher level of $67.
On the flip side, the price may find support at $66. If that happens, range-bound trading between $66 and $66.75 is probable.