- Surprise draw in US crude inventories outweighed by record US oil production levels.
- Looking to stabilize above $ 67 ahead of the US rigs count data.
WTI (oil futures on NYMEX) reversed losses and jumped back into the bids, mainly driven by an improvement in risk sentiment, as reflected by rebounding European equities and Treasury yields.
However, it’s doubtful whether the black gold will sustain the upturn, as weaker oil-market fundamentals continue to dampen the investors’ sentiment. The upward spike on a surprise drop in the US crude stockpiles was quickly reversed, as rising US oil production levels outweighed the unexpected drawdown.
The US crude stockpiles fell 3.6 million barrels last week, the EIA data showed, beating expectations for a decline of 525,000 barrels. Meanwhile, the US crude production climbed 215,000 barrels per day (bpd) to 10.47 million bpd in March, hitting a new monthly record.
Further, Reuters news that Saudi Arabia and Russia are said to raise the OPEC and non-OPEC output by around 1 million bpd when they meet next month in Vienna, also remains a drag on the barrel of WTI.
Markets now eagerly await the US rigs count data and employment numbers for fresh direction on the USD-sensitive oil.
WTI Technical levels
According to Nenad Kerkez, Elite CurrenSea’s Head trader, “the WTI started a bearish move at the break of bullish wedge top and now it is trading within the horizontal channel. However, the price is currently below the EMA89 and MACD is below zero line so we might see another drop. 67.20-40 is the POC zone. Rejections from the zone should target 66.52 and 66.06. Below the channel, targets are 65.28 and 64.37. However, a spike above 67.55 will change the tide and targets are 67.93 and 68.70. This might likely happen on profit taking – if shorts start to close their positions today. Pay attention to the POC zone.”
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