Upbeat crude inventories could boost oil price for break above 200DMA
WTI oil price is holding within tight range under Tuesday’s recovery high at $57.46 on Wednesday, with falling 200DMA ($57.23) continuing to cap for the second consecutive day.
WTI contract advanced 1.7% in late Tuesday’s trading, after API report showed unexpected fall in crude stocks by 11 million barrels in the week to 19 July, against expectations for 4 million barrels draw and previous week’s draw of 1.4 million barrels.
Rising tensions in the Middle East added to positive tone this week.
Oil price is gaining bullish momentum that underpins the action for eventual break above key barriers at $57.18/23 (Fibo 38.2% of $60.96/$54.84 / 200DMA) that would general strong signal for extension of recovery leg from $54.84 (18 July low) and expose next strong barrier at $57.63 (daily cloud top / Fibo 61.8%).
Market is waiting for release of US EIA crude inventories report (consensus for 4 million barrels fall in crude stocks vs previous week’s fall at 3.1 million barrels), with stronger than expected draw expected to inflate oil price.
Disappointing numbers, on the other side, could soften bullish tone and keep the price under 200DMA that would result in fresh weakness.
Res: 57.23; 57.49; 57.87; 58.62
Sup: 56.76; 56.29; 55.72; 55.07