WTI looks to settle with strong gains near $40

• WTI erased a large portion of Tuesday’s losses.
• Weekly EIA data showed crude oil stocks in the US declined by 2 million barrels.
• OPEC output rose by 160,000 bpd in September.

After suffering heavy losses on Tuesday, crude oil staged a decisive rebound and the barrel of West Texas Intermediate (WTI) touched a daily high of $40 before going into a consolidation phase. As of writing, the WTI was up nearly 2% on a daily basis at $39.85.

EIA’s stock report helps WTI push higher

The risk-positive market environment, as reflected by strong gains witnessed in Wall Street’s main indexes, seems to be helping crude oil find demand on Wednesday. At the moment, the S&P 500 Index is up 1.45% on a daily basis at 3,383.

Meanwhile, the weekly data published by the US Energy Information Administration (EIA) provided an additional boost to the WTI. The EIA announced that crude oil inventories declined by 2 million barrels in the week ending September 25th, compared to analysts’ estimate for an increase of 1.56 million barrels.

Earlier in the day, Reuters reported that its latest survey showed that crude oil output of OPEC in September rose by 160,000 barrels per day (bpd) tp 24.38 million bpd. However, Reuters further noted that OPEC+ has reportedly reached a 101% compliance of pledged oil output reductions and helped crude oil preserve its bullish momentum.

Technical levels to watch for