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  • Higher than expected build in inventories join the absence of fresh Geopolitical threat from the US-Iran front to trigger the latest decline.
  • PMI and trade developments will be in the focus.

Having touched $61.00, WTI is little positive from it’s one week low to $61.30 during early Thursday. The black gold previously declined after weekly inventory report for the US registered larger than expected build while the absence of fresh negatives from the US-Iran front also played their role.

The US crude oil stocks grew past -600K forecast to 4.7 million barrels in the week ending May 17, the Energy Information Administration (EIA) report said on Wednesday.

There have been fewer headlines concerning the geopolitical tension between the US and Iran after the US President Donald Trump showed readiness to talk with Iran when it’s ready. However, Reuters reported that Iran’s Supreme Leader Ayatollah Ali Khamenei said that  Iran’s youth will witness the demise of Israel and American civilization, which in turn signal dark days ahead.

Adding to the energy benchmark’s downside could be on-going trade tension between the US and China. Recently, the Trump administration is likely to add Chinese companies to its blacklist and has turned down any plans to visit Beijing soon.

While qualitative catalysts are likely to keep driving energy prices, a slew of purchasing manager index (PMI) from Australia, Eurozone, and the US may offer intermediate direction to the quote.

Technical Analysis

A decline under 50-day simple moving average (SMA) highlights the March month top near $60.30 as immediate support ahead of pushing bears towards $60.00 and then to 100-day SMA level of $58.10.

Meanwhile, an upside clearance of $62.20 SMA barrier could trigger the rise targeting recent highs near $63.80 and $64.00 with an area including early April highs around $64.70/80 likely being buyers favorite then after.