Crude Oil Price Extends Gains After Better-than-expected Oil Draw

Summary:

Crude oil price has extended gains from the previous session after the better-than-expected oil inventory data from API. The focus is now on EIA's data.

Crude oil price has extended its previous gains after the better-than-expected US oil inventory data. Late on Tuesday, the American Petroleum Institute indicated that oil stockpiles had dropped by 8.153 million barrels for the week ending on 25^th June. The figure is higher than the prior week’s draw of 7.199 million barrels and the forecasted decline of 4.460 million barrels.

Investors are now keen on EIA’s inventory data later in the day. In the previous release, the agency has highlighted that the weekly crude oil inventories were down by 7.614 million barrels. In this week’s release, analysts expect a lower draw of 4.686 million barrels. As for gasoline inventories, the forecasted drop of 0.886 million barrels is lesser than the prior week’s reading of -2.930 million barrels.

The oil stockpile data comes at a time when the rising cases of COVID-19 are exerting pressure on the growth of fuel demand globally. Investors are eyeing the OPEC+ talks scheduled for Thursday for further guidance on their supply policy for August. Analysts expect the coalition to increase output by 500,000 bpd in August.

WTI oil price forecast

Crude oil price has rebounded on the optimism heightened by API’s oil stockpile data. At the time of writing, WTI futures were up by 0.02% at 73.46. In the previous session, it had hit an intraday low of 72. On a two-hour chart, it is trading above the 25 and 50-day EMAs.

Depending on EIA’s data, I expect crude oil price to retest the prior resistance level at 74.19. On the flip side, a lower oil draw may have the prices experiencing resistance at the lower level of 73.70, while finding support at 73.15.