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  • WTI futures bounce up from $39.05 and return to levels near $40.
  • Oil prices rise after the EIA reports a larger than expected decline on stocks.
  • Crude prices remain capped below $40 after having posted their best quarter in decades.

Front-month WTI futures are picking up following a larger than expected decline of crude oil stocks to return to levels near $40.The West Texas Intermediate, which had dropped about $1.50 to session lows at $39.05, is regaining lost ground, buoyed by the EIA report.

 

Oil prices bounce up following oil stocks data

The larger than expected decrease in US oil stocks has given a fresh push to WTI futures. The Energy Information Administration (EIA) has reported a 7.2 million decline on US oil stocks on the week of June 26, beating expectations of a 710,000 drop and following a 1.4 million increase over the previous week.

WTI oil prices have remained trading between $37 and $40 during the last three weeks after having surged 91% in the previous two months to close the best quarterly performance since the third quarter of 1990 during the first Gulf War. Market hopes of a quick recovery have been supporting the oil rally, while concerns of a second coronavirus wave remain weighing on commodity prices.

From a technical point of view, WTI futures remain capped below $40.50 (Jun 24 high, Intra-day high) with next resistance areas at $41.61 (Jun. 23 high) and $44.00 (200-day SMA) On the downside, immediate support lies at 38.90 (Jun. 30 low) and below here, 37.00 (Jun. 17, 25 lows) and 34.34 (Jun.15 low).

 

WTI key levels to watch