WTI back in the red below $ 68, EIA data eyed

• Surprise build in US crude inventories and hopes of output boost continue to weigh.
• EIA crude stockpiles data to offer fresh direction on the prices.

WTI (oil futures on NYMEX) resumed its ongoing bearish momentum on Thursday, reversing a temporary bounce seen yesterday after the Russian central bank’s warned on the prospects of oil output boost by the OPEC and non-OPEC producers.

Saudi Arabia and Russia are said to raise the OPEC and non-OPEC output by around 1 million bpd when they meet next month in Vienna, Reuters reported last week.

However, the barrel of WTI stalled its relief rally and returned to the red zone, as an unexpected build in the US crude stockpiles continues to dampen the investors’ sentiment.

The latest data from the American Petroleum Institute (API) showed that the US crude stockpiles rose by 1 million barrels in the week to May 25 to 434.9 million, against analyst expectations for a decrease of 525,000 barrels.

Meanwhile, Reuters reported late-Wednesday that Iran wrote a letter to the OPEC, seeking support against the US sanctions. Attention now turns towards the Energy Information Administration (EIA) crude inventories data due to be reported later today.

WTI Technical levels

Jason Sen, Director at DayTradeIdeas.com, noted: “WTI Crude tops almost exactly at our target of 6840/50 as predicted. Easy money! Look for support at 6760/50 but below here 6730 risks slide to 6700/6690 & perhaps as far as 6655/50. A retest of the double bottom low at important support at 6600/6580 is a buying opportunity with stops below 6530. Obviously strong  resistance  at 6840/60 is key for bulls. I doubt this will hold for too long. A break higher targets 6925/35.”