WTI edges lower toward $68 on rising crude oil stockpiles

• WTI retreats from highs in post-settlement trade.
• API data shows an unexpected increase in crude oil stocks.
• WTI is still up more than 2% on the day.

The barrel of West Texas Intermediate erased a small part of its daily gains in the post-settlement trade after the weekly API report showed an increase in crude oil stocks. As of writing, the barrel of WTI $68.20, up $1.5, or 2.2%, on the day.

According to the API, crude oil inventories in the U.S.  increased by 1 million barrels in the week ending May 25 to 434.9 million vs. experts’ expectation of a 525,000 barrels decrease.  

Earlier this week, crude oil prices came under pressure following reports of OPEC and Russia planning to increase the production to counter the decreased supply from Iran and Venezuela. However, another report published earlier today by Reuters, citing sources close to Saudis, claimed that  Saudi Arabia, other OPEC states, and non-OPEC allies would extend their  global pact on cutting oil supplies until the end of 2018 and would even consider an extension if they saw it appropriate, and helped the WTI stage a strong recovery.

Technical levels to consider

The barrel of WTI could encounter the first resistance at $68.70 (May 30 high) ahead of $70 (psychological level) and $71.35 (May 9 high). On the downside, the immediate support is located at $68 (psychological level) before $66.40 (May 30 low) and $65.80 (May 28 low).