- Improved market sentiment helped commodities recover on Wednesday.
- Weekly EIA report shows large buildup in crude inventories.
- WTI looks to close the day in the green following yesterday’s sharp fall.
Amid a lack of fundamental developments that could have kept the bearish pressure strong, crude oil prices staged a technical recovery during the first half of the day on Wednesday and the barrel of West Texas Intermediate rose to a daily high of $67.70. The upbeat tone surrounding the European equity markets also provided an additional boost to the risk-sensitive commodities.
However, with the weekly report published by the U.S. Energy Energy Information Administration revealing an increase of 6.3 million barrels in crude oil stocks, the WTI failed to preserve its strength and retraced a portion of its daily upside. As of writing, the WTI was trading around $67, still adding 1.5% on a daily basis. Further details of the report revealed that the gasoline production decreased last week to 10.0 million barrels per day while the distillate fuel production rose to 5.0 million barrels per day.
Additionally, citing sources familiar with the matter, Reuters reported that two Chinese state-owned refiners were not planning to load Iranian oil for November as U.S. sanctions on Iranian oil exports are set to go into effect on November 4th, helping crude oil cling to daily gains.
Technical levels to consider
The WTI could encounter the initial resistance at $68 (Aug. 22 high) ahead of $69.30 (Aug. 24 high) and $70 (psychological level/50-DMA). On the downside, supports align at $65.70 (Oct. 23 low), $64.50 (Aug. 15 low) and $63.60 (Jun. 18 low).
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