WTI OIL – recovery attempts remain capped by thick daily cloud ahead of crude stocks data
WTI oil trades higher on Wednesday and regains $61 handle, but recovery attempts so far hold below the base of thick daily cloud which marks solid resistance at $61.23.
Oil price bounced from new low at $60.26, posted after strong two-day fall on Mon/Tue, on mild support from API crude stocks report which showed oil inventories rose less than expected last week (1.15 million barrels vs 1.5 million barrels f/c).
However, near-term outlook remains negative as rising US oil production continues to weigh and offset efforts from OPEC-led production cut program to stabilize oil market.
Also, bearish daily techs add to existing pressure, seeing bears intact for fresh downside while daily cloud caps recovery attempts.
Tuesday’s strong downside rejection suggests oil price may hold in extended consolidation before renewed attack at cracked psychological $60 support and rising 100SMA ($59.85).
EIA crude stocks report is due later today and focused for fresh signal. Forecast shows build of crude inventories by 2 million barrels vs previous week’s build of 2.4 million barrels.
Unless strong surprise at the downside (weaker than expected build in stockpiles or possible draw) data are expected to keep oil prices pressured.
Alternative scenario requires return and close in daily cloud to ease existing bearish pressure and signal stronger recovery of $62.31/$60.26 bear-leg.
Res: 61.23; 61.53; 61.87; 62.31
Sup: 60.60; 60.13; 59.94; 59.85