The West Texas Intermediate (WTI) crude, a North American oil benchmark, is trading in a sideways manner around the 10-day Simple Moving Average (SMA) of $45.50, having traded back and forth in the range of $45.14 to $45.93 on Tuesday, forming an indecisive Doji candle on the daily chart.
The immediate bias would remain neutral while prices are held in Tuesday’s trading range. A downside break cannot be ruled out courtesy of rising US oil inventories.
On Tuesday, the American Petroleum Institute (API) reported an inventory build of 1.141 million barrels for the week ending Dec. 4. Analysts had predicted a draw of 1.514 million barrels. Stockpiles rose by 4.146 million barrels in the preceding week, disappointing expectations for a 2.358 million barrels draw.
Further, the Energy Information Administration data showed the US oil production rose by 100,000 barrels per day to 11.1 million barrels per day during the week ended Nov. 27, narrowly missing the all-time high of 13.1 million barrels per day reached in March.
The continued uptick in inventories indicates renewed weakness in demand in the world’s biggest economy, possibly due to coronavirus resurgence. While that favors a downside move in oil, significant losses may remain elusive, courtesy of a weak US dollar. The dollar index, which tracks the greenback’s value against majors, recently fell to multi-month lows below 91.00 on expectations for US fiscal stimulus.
Technical levels
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