Levels to watch with crude oil price steady above $73

Summary:

Crude oil price is steady above $73 despite pulling back from its highest level since October 2018 in its previous session.

Crude oil price remains above $73 after the better-than-expected US oil inventory data. Late on Tuesday, the American Petroleum Institute (API) indicated that oil stockpiles had dropped by 7.199 million barrels in the week ending on 18^th June. While the figure was lower than the prior week’s draw of 8.537 million barrels, it was significantly better than the expected reading of -3.625 million barrels.

EIA confirmed this trend on Wednesday by highlighting that crude oil inventories had fallen by 7.614 million barrels. The number beat analysts’ estimates of -3.942 million barrels and the prior week’s reading of -7.355 million barrels.

Notably, oil stockpiles have been on a steady decline since mid-May as the summer travel season gains momentum. Gasoline inventories also declined by 2.930 million barrels, which was better than the forecasted increase of 0.833 million barrels.

The data comes in a week ahead of the OPEC+ meeting, which will be a key catalyst for crude oil price. The focus of the meeting will be its August production policy after the gradual increase of 2 million bpd ends in July. Some of its members are in favor of increased output.

WTI oil technical outlook

Crude oil price is steady above 73 despite pulling back from Wednesday’s intraday high of 74.20. The intraday high was its highest level since the beginning of October 2018. On a three-hour chart, WTI futures is trading above the 25 and 50-day EMAs.

I expect crude oil price to continue finding support along the 25-day EMA at 72.91. Below that, the next support level will be along the 50-day EMA at 72.36. On the upside, the bulls may manage to push the prices past Wednesday’s high of 74.20 to find resistance at 72.50.